I rate these two ASX share investments as two of the highest-quality that Aussies can buy.
Pro Medicus Ltd (ASX: PME)
Pro Medicus is arguably the highest-quality business on the ASX.
It provides a leading offering of radiology imaging solutions (RIS), picture archiving and communication system (PACS), artificial intelligence (AI) and e-health solutions. It has clients including hospitals, imaging centres and healthcare groups.
The business has incredibly high profit margins, including the EBIT margin (EBIT explained), which improved by 90 basis points (0.90%) to 74.9% in FY26. That means that virtually three quarters of revenue is turning into EBIT.
It’s growing at a fast speed, which is increasing its underlying value rapidly. Excluding currency changes, underlying revenue rose 28.4% to $273.5 million, underlying EBIT grew 30.6% to $206 million and underlying net profit after tax (NPAT) increased 32.5% to $154.5 million.
How many ASX shares are growing their net profit by more than 30% (or even 20%) during this period?
The company continues to win new contracts with clients, particularly in the US. It’s also renewing contracts at a higher transaction rate, which is a great driver of further profit growth.
In five years, I think Pro Medicus could be significantly more profitable, making today’s valuation attractive.
VanEck MSCI International Quality ETF (ASX: QUAL)
I think Australians can significantly benefit from investing in international shares, particularly high-quality shares.
This exchange-traded fund (ETF) invests in a portfolio of 300 of the largest companies on the global stock market. But, they’re not just any 300 businesses, they’re viewed as the world’s highest-quality companies.
To judge quality, there’s three fundamentals. First, they must have a high return on equity (ROE). Second, they must demonstrate earning stability. Third, they should have low financial leverage.
When you combine those three factors, you get a very high-quality list of businesses.
Over the past decade, the QUAL ETF has returned an average of 15.4% per year. It may not be that strong over the next decade, but the future is looking bright.
I’m very glad I’m invested in both of these ASX share investments and I expect it will continue to be a smart move to own high-quality companies in the future.
