2 ASX 200 shares I’d buy for global long-term returns

A businessman holding a world globe in one hand, representing global investment.A businessman holding a world globe in one hand, representing global investment.

The S&P/ASX 200 Index (ASX: XJO) can be a very good place to look for investment opportunities because some of the ASX 200 shares in the index are delivering global growth.

I think Australia is a great country for companies to do business in, however, it has a population of less than 30 million. But, if a company is growing overseas then it has opened up a much larger addressable market to grow into over time.

Having more room to grow means that the business could theoretically grow its profit more, which could also mean stronger share price growth and dividend growth. With that in mind, I think the below two ASX 200 shares have long growth runways.

Breville Group Ltd (ASX: BRG)

Breville describes itself as an iconic global brand that designs and sells kitchen appliances in over 70 countries. It sells things like coffee machines, juicers, blenders, ovens, air fryers, microwaves, cookers, kettles and ice cream makers.

The Breville share price is down close to 20% over the past year, giving investors a much cheaper potential entry price. It continued to report growth in the FY23 first half, with revenue growth of 1.1% and net profit after tax (NPAT) growth of 1.3%. That was despite all of the economic impacts of inflation and higher interest rates during the period.

Breville is expecting a “healthy” cash inflow in the second half as receivables are collected and a more predictable supply chain allows for a return to a more normal inventory flow model.

The ASX 200 share is doing its best to achieve growth over the long term, with new product launches, a growing direct-to-customer channel, new geographies maturing and cost improvements.

In FY23, the business is expecting to achieve earnings before interest and tax (EBIT) of between $165 million to $172 million, which would be 5% to 10% growth from the previous year.

According to Commsec, Breville is valued at 21 times FY25’s estimated earnings.

Premier Investments Limited (ASX: PMV)

Premier Investments is a retail business with a number of apparel brands including Just Jeans, Portmans, Dotti, Jacqui E, Jay Jays and Peter Alexander. The ASX 200 share also owns Smiggle, a business that sells stationery and other useful products (such as bags, lunch boxes and drink bottles) where Smiggle has partnered with brands to put imagery from movies (like Harry Potter), games (like Minecraft) and sports (such as the AFL).

The ASX 200 share also owns a substantial stake in the retailers Breville and Myer Holdings Ltd (ASX: MYR).

While the apparel brands are largely based in Australia, Peter Alexander is currently “planning for future offshore market opportunities”, including a partnership agreement being finalised with a global cross-border e-commerce provider to “grow the brand internationally across 35 countries.”

Smiggle is already in a number of countries. The business believes there are door growth opportunities with its wholesale channel where it can gain more market share in existing markets, such as the Middle East, Indonesia and Thailand. It’s also exploring opportunities in both “existing and potential new markets.”

Smiggle believes that it can grow the proprietary business in existing regions by at least a further 30 stores, increasing the store count by between 10% to 15%, which “leverages the existing team and infrastructure and enables a faster rollout.”

Premier Investments is valued at 16 times FY25’s estimated earnings.

The post 2 ASX 200 shares I’d buy for global long-term returns appeared first on The Motley Fool Australia.

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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 no position in any of the stocks mentioned. The Motley Fool Australia has recommended Premier Investments. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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