2 ASX 200 shares that might be buys for growth

These 2 ASX 200 shares might be good options for growth.

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The two S&P/ASX 200 Index (ASX: XJO) shares in this article that could be ideas for growth.

Businesses that are producing profit growth give themselves a chance of generating shareholder returns.

These two could be options to consider:

Magellan Financial Group Ltd (ASX: MFG)

Magellan is a funds management business that is focused on global equity investing strategies for investors.

It currently manages around $110 billion of money. In the first half of FY21, its average funds under management (FUM) was up 9%. This drove half-year management and services fees revenue up 8% to $311.4 million. Profit before tax and performance fees of the funds management business grew 8% to $256.2 million.

Higher FUM means can mean the business can earn more management fees and profit.

The ASX 200 business is producing more FUM growth with its Magellan FuturePay product where investors have built up a capital amount and want to receive regular and predictable income that grows with inflation without eating into the capital base. It will invest in high quality global shares and global listed infrastructure. FuturePay comes with a support trust that will provide income support in falling markets.

Magellan has also been investing in external businesses itself that will provide returns whilst also contributing to the intellectual property of the funds management.

It's currently rated as a buy by the broker Morgans with a price target of $58.26. Magellan is valued at 21x FY22's estimated earnings according to Morgans.

Premier Investments Limited (ASX: PMV)

Premier Investments is one of the largest retailers on the ASX with a market capitalisation of $4.45 billion according to the ASX.

It owns a number of different clothing retailers including Just Jeans, Jay Jays and Peter Alexander. Premier Investments also owns the Smiggle brand. Plus, it has a shareholding of Breville Group Ltd (ASX: BRG) that's worth just over $1 billion.

The business is expecting to grow its FY21 underlying earnings before interest and tax (EBIT) by between 82% to 92% to a range of between $340 million to $360 million.

Premier Investments said it's seeing strong online sales growth and "highly profitable" online performance. It has also seen "exceptional" gross margin expansion in the second half of FY21, up 380 basis points.

The ASX 200 share also said that it has a strong cost culture including continuing to reach agreements with landlords that have rebased the company's rent expense.

One of the main areas for growth that Premier Investments is focused on is Smiggle, which it called a powerful global brand set to rebound and grow, particularly as it recovers from COVID-19 impacts.

The ASX 200 company said that Smiggle has been strategically positioned for maximum EBIT growth as sales rebound.

Premier Investments also pointed to its decision to invest in its distribution centre which has allowed it to scale up its online fulfillment in response to the huge demand, which provided the company with "significant operating leverage". Plans have commenced to expand this facility during the 2022 calendar year.

According to Commsec, it's valued at 23x FY22's estimated earnings.

Motley Fool contributor Tristan Harrison owns shares of Magellan Financial Group. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Premier Investments 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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