2 high-quality ASX 200 shares to buy

These 2 S&P/ASX 200 Index (ASX:XJO) shares are high-quality businesses and could be worth owning for their long-term growth potential.

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There are some very high quality S&P/ASX 200 Index (ASX: XJO) shares that would be worth owning for the long-term.

Some ASX 200 shares have proven to be very defensive, even during a pandemic. They are large enough to be reliable but small enough to have plenty of growth potential.

Bapcor Ltd (ASX: BAP)

Bapcor is the largest auto parts business in Australasia with a number of different divisions.

It recently expanded its exposure to Asia after an important investment in Tye Soon. It now owns 25% of the business. Tye Soon is described as the most prominent independent auto parts distributor in South East and North East Asia. It has operations in Singapore, Malaysia, Thailand, Hong Kong, South Korea and Australia. This business makes around $200 million Singaporean dollars of annual revenue. This 25% stake cost S$12.5 million.

Bapcor is also growing its own Burson business in Asia, starting in Thailand. Burson is the key profit driver of the ASX 200 share, with a large client base of mechanics across Australia. Burson grows profit in a number of different ways. It grows same store sales, Burson is adding stores (it now has around 200) and the earnings before interest, tax, depreciation and amortisation (EBITDA) margin continues to rise.

But Burson isn’t the only division that’s growing. Autobarn is seeing a retail boom and the specialist wholesale businesses are also seeing good growth. Bapcor has also recently expanded into truck parts as well.

The ASX 200 share has plans to grow its networks of trade, retail and service locations over the coming years. It also wants to sell more private label products and increase efficiencies.

According to Commsec, the Bapcor share price is valued at just 20 times FY22’s estimated earnings.

Sonic Healthcare Ltd (ASX: SHL)

Sonic Healthcare is one of the biggest ASX 200 healthcare shares.

The business has a large presence in pathology in Australia, Europe and North America. It has been growing for a few decades and it’s providing a very valuable service in COVID-19 testing with its PCR tests. It has been conducting millions of tests.

Its pre-COVID business is proving to be increasingly resilient to the impacts of the pandemic.. When COVID-19 subsides, Sonic should be able to grow with the ageing demographics and the advancements in medical diagnostics.

During this pandemic, Sonic’s experience shows that the temporary base business declines are more than offset by increased COVID-19 testing.

The high levels of profit has reduced its debt levels and now Sonic is well positioned to continue to pursue value-accretive growth opportunities, including acquisitions. It’s also looking at contract and joint venture growth opportunities. Sonic is bidding on “significant” opportunities in Australia, the UK, the USA and Canada.

Sonic says that geographical diversification provides increased opportunities for expansion.

The company expects that COVID-19 PCR testing will continue for the foreseeable future and there’s potential demand for COVID-19 serology testing (which looks at the immunity status).

According to Commsec, the Sonic share price is valued at 24x FY22’s estimated earnings.

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Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Bapcor. The Motley Fool Australia has recommended Sonic Healthcare Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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