4 dependable stocks for a comfortable retirement


Investors building an income-generating portfolio will be able to retire comfortable and worry free. The importance of owning companies which provide defensive streams of income is therefore paramount.

As investors discovered during 2013 there are whole industries which are prone to enormous cyclical swings. These take businesses from high earnings and profit margins, to sudden low margins and weak earnings – in case you haven’t guessed, I’m referring to the mining services industry.

In contrast, there are a handful of companies which over many years (usually decades) have built large, diversified customer bases and revenue and earnings streams which are defensive and dependable in nature. These steady businesses have the benefit of offering investors a reliable and steady stream of dividends, thanks to their consistent stream of earnings.

Here are four companies which can all boast of having defensive characteristics and historically have provided shareholders with dependable dividends.

1) Woolworths (ASX: WOW) has a track record of consistently growing dividends for over 15 years. In financial year (FY) 2013 the supermarket retailer paid 133 cents per share (cps) in dividends, at its current share price of $33.89 this implies a dividend yield of 3.9%.

2) Ansell (ASX: ANN) has continued to expand its operations around the globe, while at the same time expanding its dividend year-after-year. In FY 2013 the manufacturer raised its dividend from 35.5 cps to 38 cps. With the share price currently at $20.59, this implies a dividend yield of 1.8%.

3) Amcor (ASX: AMC) boosted its dividend payments from 37 cps to 40 cps in FY 2013. Apart from a dip in the pay out in FY 2010, the global packaging giant has been consistent in its payments for over a decade. FY 2014 will see a change in dividend payments due to the recent demerger of the Orora (ASX: ORA) business. This means long-term shareholders will now receive dividends from two companies rather than one.

4) Coca-Cola Amatil (ASX: CCL) has an impressive track record of dividend growth. Assuming a full-year dividend payment consistent with the prior year of 56 cps, at its current share price of $12.06 per share the stock is trading on a yield of 4.6%

Foolish takeaway

As the saying goes: “Only two things in life are certain – death and taxes.” However, a careful analysis of quality companies can also allow investors to identify reliable dividend payers.

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Motley Fool contributor Tim McArthur does not own shares in any of the companies mentioned in this article.