2 ASX 200 shares that might be buys for growth

Resmed and Cleanaway are two ASX shares that could be ASX 200 growth opportunities.

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There are a handful of S&P/ASX 200 Index (ASX: XJO) shares that have the potential to produce growth over the longer-term.

Businesses in the ASX 200 might be one of the national or global market leaders in their industry. COVID-19 has been disruptive but there could be growth potential over the longer-term for these two ASX shares:

Resmed CDI (ASX: RMD)

Resmed is an ASX healthcare tech share. Its digital health technologies and cloud-connected medical devices provide care for people with sleep apnea, chronic obstructive pulmonary disease (COPD) and other chronic diseases. Resmed says that its out-of-hospital software platforms support the professionals and caregivers who help people stay healthy.

Some of its products have been involved in helping in the treatment of COVID-19 patients. But the global recovery from these COVID times and vaccinations are seeing an ongoing of core patient flow across the business.

Excluding the COVID-19 revenue from the quarter ending 31 March 2020 quarter, the ASX 200 share achieved positive revenue growth in the quarter ending 31 March 2021. Net operating profit also increased.

The Resmed CEO Mick Farrell said:

Going forward, we see accelerated awareness of the importance of respiratory health, growing adoption of digital health, and an increased focus on the importance of healthcare delivered at home. We are confident in accelerated growth in patient flow, and ongoing progress toward our goal of improving 250 lives in out-of-hospital healthcare in 2025.

According to Commsec, the Resmed share price is valued at 47x FY21's estimated earnings.

Cleanaway Waste Management Ltd (ASX: CWY)

Cleanaway is a leading total waste management, industrial and environmental services ASX 200 share. It has the largest waste, recycling and liquids collections fleets on the road, supported by a network of recycling facilities, transfer stations, engineered landfills, liquids treatment plants and refineries.

There are a few different growth trends that Cleanaway can benefit from. After export bans, there is an onshoring recycling opportunity. There is also a move towards a 'circular economy' with demand for locally recycled inputs.

Energy from waste is also an emerging multi-dollar industry, according to the ASX 200 business. It could be a key way to reduce greenhouse gas emissions.

Cleanaway recently announced a $501 million acquisition of Suez's post collection assets to enhance its Sydney footprint. It delivers more than 10 years of airspace in the attractive Sydney market, whilst complementing Cleanaway's collections operations.

This deal immediately adds to its underlying earnings and increases margins.

In the first half of FY21, it grew its underlying net profit after tax by 6.5%, with statutory profit jumping 75.3% to $79.4 million.

At the time of the half-year result, the ASX 200 share said that uncertainty in the trading environment continues, more so in some regions and industries than others. Despite that, Cleanaway said it remains confident that FY21 underlying EBITDA will be moderately higher than FY20.

Cleanaway is currently rated as a buy by Macquarie Group Ltd (ASX: MQG) with a price target of $3. The broker likes the growth trends that Cleanaway is exposed to.

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