There are a number of S&P/ASX 200 Index (ASX: XJO) shares that may be good ideas for growth.
Businesses that are among the biggest and best at what they do may be able to keep growing earnings and increase their economic advantages over time.
These two ASX 200 shares could be good ones to think about:
ResMed Inc (ASX: RMD)
ResMed is a global leader in the healthcare world. It aims to provide cloud-connected medical devices that help people with sleep apnea, chronic obstructive pulmonary disease (COPD) and other chronic diseases. One of the products that ResMed offers is cloud-connected ventilators. The healthcare business also has software as a service (SaaS) offerings including a “network of out-of-hospital healthcare management solutions designed to help providers deliver more personalised care, measurable results and improved health outcomes.”
The ASX 200 company recently released its result for FY21 which showed ongoing growth of the business. The 2021 financial year saw revenue increase 8% to $3.2 billion and underlying income from operations increasing 12% to $890.9 million.
Excluding the impact of incremental respiratory care revenue associated with COVID-19, revenue increased by 29% on a constant currency basis.
ResMed said that its digital health solutions provide efficiency and lower costs for providers and payers, as well as better quality-of-life and clinical outcomes for patients and physicians.
The company also said that it’s confident in its ability to grow steadily through FY22.
Morgans thinks that ResMed is currently a buy, with a price target of $41.34. The broker suggested that ResMed’s medium-term outlook is positive after Philips, a competitor, had to recall some devices.
Using the broker’s forecast for FY23’s earnings, the ResMed share price is valued at 41x next financial year’s earnings.
Netwealth Group Ltd (ASX: NWL)
Netwealth is a fintech ASX 200 share that offers investors a platform. Personal investors can use it for their superannuation or non-superannuation. Wealth professionals can utilise Netwealth as an investment and superannuation platform that manages accounts, international investment, managed funds, ASX shares and insurance providers.
It’s currently rated as a buy by the broker Credit Suisse after getting a look at the company’s FY21 result.
That report saw revenue increase by 16.9% to $144.9 million. This helped earnings before interest, tax, depreciation and amortisation (EBITDA) increase by 19.9% to $79.3 million and net profit after tax (NPAT) increased by 23.9% to $54.1 million. The total dividend was increased by 26.3% to 18.56 cents per share.
One of the things that Netwealth pointed out was that it continues to diversify its revenue composition. Transaction fee revenue increased to 12% of platform revenue in FY21, an increase from 9% in FY20. This was driven by higher trading volumes, additional revenue streams and improvements in its trading margins thanks to its larger scale.
Total funds under administration (FUA) at 30 June 2021 was $47.1 billion for the ASX 200 share, an increase of 49.6%.
Netwealth believes that it will continue to grow its market share over the years ahead after the major banks exited financial advice.
The company also pointed to the fact that the changing advice landscape is leading to the establishment of new independent advice groups while other formerly aligned advisors move to existing independent advice groups. This provides the business with “significant” new and substantial opportunities.
Credit Suisse has target price on Netwealth of $15.80. The broker thinks it’s valued at 57x FY22’s estimated earnings.