When buying an S&P/ASX 200 Index (ASX: XJO) stock to add to your portfolio, one of the core metrics to look at is the company's recent growth trend. And, more importantly, the outlook for growth in the years ahead.
That's one of the best ways to secure ongoing share price and dividend growth, which is what we're after!
With that in mind, we look at why two investing experts are tipping ASX 200 stock Pro Medicus Ltd (ASX: PME) as a company to buy and hold onto.
What's happening with the ASX 200 stock?
Shares in the health imaging company closed 0.24% higher yesterday at $128.40.
That sees the Pro Medicus share price up a whopping 84.4% in a year. This gives the company a market cap of $13.4 billion.
And according to Jun Bei Liu, lead portfolio manager at Tribeca Investment Partners, there's likely to be more strong outperformance to come from this top ASX 200 stock.
"It operates in the radiology imaging industry and is fast developing into an industry leader in the US," Bei Liu said (quoted by The Australian Financial Review).
"Challenging existing incumbent older software, Pro Medicus has very limited competition," she noted.
According to Bei Liu:
Its share in the US at this point is still under 10%, and we believe it won't be long before it doubles its market share. Pro Medicus has also been developing new products, including adding in the new cardiology vertical, which is as lucrative as radiology.
Simply put, this company's growth path is enormous, even before we start talking about AI.
Noting Pro Medicus is a top-quality ASX 200 growth stock, Bei Liu advises investors to buy the stock on any pullbacks.
Shawn Lee, portfolio manager at SG Hiscock & Company, is also bullish on Pro Medicus shares.
"The lean cost structure, high margins and pristine balance sheet at Pro Medicus also widens the margin of safety on offer," Lee said (quoted by the AFR).
Lee noted that the ASX 200 stock should be more resilient than most during economic downturns due to its hospital and healthcare-linked earnings. On the growth front, he pointed to the 12 to 18-month pipeline of customer contracts Pro Medicus has already secured.
What kind of growth has Pro Medicus delivered?
For its half-year results (H1 FY 2024), Pro Medicus reported a 30.3% year-on-year increase in revenue from ordinary activities to $74.1 million. Net profit came in at $36.3 million, up 33.3% from H1 FY 2023.
The ASX 200 stock reports its full 2024 financial year results tomorrow, 14 August.
