MENU

4 shares perfect for the blue-chip retiree

If you are 65 years or older, your risk tolerance is likely to be much lower than someone in their 20’s or 30’s.

Income shares are also likely to be more important to you, especially since franking credits are most beneficial when you are in retirement.

Lower risk growth shares can also play an important role in your portfolio, especially if you want to generate good levels of capital growth over a longer time frame.

With those points in mind, here are four shares that I think could be great additions for a retired investor:

CSL Limited (ASX: CSL)

CSL is the leading healthcare share on the ASX with a market capitalisation of $58 billion. The company has been a great performer in the past, but I think the outlook is just as positive with the demand for blood plasma and niche therapeutics set to boom over the next decade. The shares do look a little expensive at the moment, although one analyst has just slapped a $148 price target on them.

Challenger Ltd (ASX: CGF)

Challenger is the clear market leader when it comes to annuities in Australia and this means it is well placed to capitalise on the growing demand that is being generated from an ageing population. Furthermore, the company has a fast-growing boutique funds management business that adds another source of income and profits. The shares have enjoyed an extremely strong run over the past six months, so I would probably wait for a pull-back before buying the shares.

WAM Capital Limited (ASX: WAM)

WAM Capital is one of the best performing fund managers on the ASX and can be a very valuable source of franked dividends for retirees. The shares currently yield around 5.8% and also give investors exposure to the share market with less volatility.

Greencross Limited (ASX: GXL)

Greencross is Australia’s leading veterinary company and provides investors with exposure to a growing company that pays fully franked dividends. Importantly, the outlook for the veterinary sector is strong, with humans continuing to spend increasing amounts of money on animal and pet care. The shares offer reasonable value at current prices, trading at 17x earnings and offering a grossed up dividend yield of around 4%.

The four shares above offer a mix of growth and dividends, but if you just want dividends then you better read this...

A Big, Fat, Fully Franked Dividend

This company's dividend is almost the stuff of legends. Since it started paying dividends in 2007, it has increased its payout to shareholders every single year, a run that includes 21 consecutive dividend increases.

Based on the last 12-months of dividends, its shares are currently offering a fully-franked 4.8% yield, which grosses up to almost 7% when those franking credits are included. And in stark contrast to the likes of Commonwealth Bank and Telstra, this company just increased its dividend by over 13%, and guided for 2017 profits to grow by 20%!

Discover the name of this "new breed" of blue chip along with 2 others in our new FREE report "The Motley Fool's Top 3 Blue Chips Stocks For 2017."

Click here to receive your copy.

Motley Fool contributor Christopher Georges has no position in any stocks mentioned. The Motley Fool Australia owns shares of Challenger Limited and Greencross Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

HOT OFF THE PRESSES: My #1 Dividend Pick for 2017!

With its shares up 155% in just the last five years, this ‘under the radar’ consumer favourite is both a hot growth stock AND our expert’s #1 dividend pick for 2017. Now we’re pulling back the curtain for you... And all you have to do to discover the name, code and a full analysis is enter your email below!

Simply enter your email now to receive your copy of our brand-new FREE report, “The Motley Fool’s Top Dividend Stock for 2017.”

By clicking this button, you agree to our Terms of Service and Privacy Policy. We will use your email address only to keep you informed about updates to our website and about other products and services we think might interest you. You can unsubscribe from Take Stock at anytime. Please refer to our Financial Services Guide (FSG) for more information.