There are a number of high-quality S&P/ASX 200 Index (ASX: XJO) stocks that investors can choose. A leading fund manager has picked out some businesses that they believe are very attractive because of what they've done and their plans for the future.
Most businesses in the ASX 200 have been around for a while and have reached a strong market position. When companies are large and are the leader, they're likely delivering some of the best margins in their sector as well.
Fund manager Contact Asset Management has outlined some positive aspects about the following two ASX 200 stocks.
Sonic Healthcare Ltd (ASX: SHL)
The fund manager said that Sonic Healthcare has grown to become one of the world's leading healthcare providers with locations in Australia, New Zealand, the US, the UK, Germany, Switzerland, Belgium and Ireland.
Contact is attracted to the fact that Sonic Healthcare has grown into one of the largest medical laboratory providers in Australasia and Europe, and it's the third largest in the US.
In the last few years, Sonic Healthcare has expanded its footprint through several acquisitions in Germany, Switzerland and the USA. The fund manager pointed out Sonic made acquisitions amounting to $884 million in 2023 and $35 million in 2024. The ASX healthcare company also made capital investments of $224 million in 2023 and $170 million in 2024.
On top of that, the company recently received unconditional investment clearance to buy the Germa Laboratory Group, Dr Kramer & Colleagues, with the truncation expected to settle on 1 July 2025.
Another attractive feature of the ASX 200 stock for Contact is the dividend record. The fund manager said:
From its first dividend payment of 2cps back in 1994, SHL's consistent organic growth and acquisition strategy saw it declare a record interim dividend in February of 44cps, adding to SHL amazing 30-year track record of never cutting its full year dividend.
ARB Corporation Ltd (ASX: ARB)
ARB is a major player in accessories for 4-wheel drive vehicles such as bull bars, roof racks, ute lids and so on.
Contact thinks ARB has an "exceptional" track record of investing for the future. The fund manager thought the FY25 first-half result was "no different", with its continued focus on strategic investments to boost long-term growth.
ARB allocated another $25 million to increase its ownership in ORW USA from 30% to 50%, while facilitating the acquisition of US 4WD distributor 4WP.
The ASX 200 stock said ARB has expanded its Australian aftermarket footprint by acquiring retail stores and MITS Alloy, a manufacturing business, for a price of $13.3 million. The fund manager also noted that ARB invested $23.7 million during the HY25 period in property, plant and equipment to support ongoing operations and expansion.
Contact finished its positive commentary on the company's outlook for the following:
ARB currently has 75 ARB stores across Australia and will deliver a further 5 independent flagship stores in 2H FY2025. In addition, they deliver product to over 100 countries worldwide. This expansive distribution network is the result of sustained investment, strategic planning and a forward-thinking management team dedicated to long-term shareholder value.
