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2 ASX 200 COVID-19 shares to buy

These two S&P/ASX 200 Index (ASX:XJO) COVID-19 shares could be worth looking at for their continuing growth due to the pandemic.
The post 2 ASX 200 COVID-19 shares to buy appeared first on The Motley Fool Australia. –

Green piggy bank with covid mask on

There are a few S&P/ASX 200 Index (ASX: XJO) shares that are seeing a lot of growth despite, or because of, the COVID-19 pandemic.

However, the below two global businesses have been generating long-term growth and expect growth after the pandemic subsides:

Sonic Healthcare Ltd (ASX: SHL)

Sonic is one of the biggest healthcare shares on the ASX. It is a major pathology business with laboratories all around the world.

It’s currently operating in Australia, Belgium, Switzerland, the UK, Germany, the USA, Ireland and New Zealand.

Sonic’s COVID testing capability continues to play an important part in controlling the control. How important? At the time of its FY21 half-year result release, it had done over 18 million COVID PCR tests across the world.

Whilst the global business revenue (excluding COVID testing) half-year revenue was down 1%, it was hurt significantly less than the initial COVID lockdowns. But the COVID-19 testing revenue contributed significantly. HY21 revenue grew 33% to $4.4 billion, earnings before interest, tax, depreciation and amortisation (EBITDA) rose 89% to $1.3 billion and net profit rose 166% to $678 million.  

The ASX 200 COVID-19 ASX share saw margin accretion in both laboratory and imaging operations because the company was able to utilise its existing infrastructure. That includes specimen collections facilities, courier networks, laboratories and other facilities, equipment, IT, management, staff and supply chains.

Sonic is now focusing on further growth opportunities, including acquisitions, contracts and joint ventures, supported by its “very strong” balance sheet. Management revealed the business is bidding on significant opportunities in Australia, the UK, the USA and Canada.

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

Ansell Limited (ASX: ANN)

Ansell is one of the largest global makers of protective gear, specialising in gloves. It has customers in over 100 countries.

It has two main segments – industrial and healthcare. As you can imagine, the healthcare division has seen strong growth over the last year.

Ansell has successfully managed COVID-19 risks at its manufacturing locations, resulting in limited downtime. It has managed to implement price increases to offset raw materials and outsourced supplier costs.

Its non-COVID units have seen a faster and stronger comeback than previously foreseen.

The ASX 200 COVID-19 share has managed to continue to supply customers with product despite the tight raw material supply and freight constraints. Lower travel and marketing costs are also helping profitability.

Ansell is investing in key capacity expansion to meet the increased demand. These expansions are on track.

Over the longer-term, Ansell is expecting more growth even after a high level of vaccinations because of enhanced safety practices at plants and hospitals, better protection awareness leading to increased glove use per capita (particularly in emerging markets), elevated research and testing activities worldwide, improving industrial activity and the potential need for annual COVID-19 vaccinations.

Ansell is expecting the FY21 second half sales growth to be strong despite the solid performance of the prior corresponding period. It’s expecting earnings per share (EPS) to be in the range of US$1.92 to US$2.02.

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

The post 2 ASX 200 COVID-19 shares to buy appeared first on The Motley Fool Australia.

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