Not many people know it (or choose to accept it) but the share market is the best driver for your wealth. Sure, buying property is a great Australian pastime but high prices, transaction costs and often meagre rental income should give you confidence that demand for high-yielding dividend stocks will continue for many years into the future and enable the share market to outperform any other asset class.
If you're preparing for retirement and currently weighing up your options, I believe you should focus your attention on well-known income stocks included in Australia's S&P/ASX 200 (ASX: XJO) (^AXJO).
Here are five strong companies I've identified for long-term investors who wish to have both a steady income and modest capital gains throughout their retirement.
1. Amcor Limited (ASX: AMC) provides transportation and packaging for customers across Australia, Asia, North and South America and Europe. With an ongoing push into Asian markets, Amcor's earnings will rise modestly over time. So too will its 3.8% dividend.
2. Coca-Cola Amatil Ltd (ASX: CCL) needs no introduction but as the sole distributor of one of the world's most powerful brands (and many others), CCA should be considered a good long-term buy at current prices. In 2014 it is expected to pay a 4.6% dividend.
3. Telstra Corporation Ltd (ASX: TLS) pays a great dividend but its growth strategy is just as exciting. With a solid platform from which it'll leverage growth in Asia, Telstra, like Amcor, has an exceptional business model and dominates its industry. It is forecast to pay a 5.3% dividend in the coming year.
4. Village Roadshow Ltd (ASX: VRL) is a great Australian brand with global presence. It's the name behind theme parks like Warner Bros. Movie World, Wet'n'Wild and Sea World but also a producer of Hollywood blockbusters and the name behind Village Cinemas. It is expected to pay a 4.2% dividend in the next 12 months.
5. Westfield Property Trust (ASX: WRT) is the part owner of shopping centres throughout Australia and New Zealand. Despite a proposed name change and "split" of its operations from the globally focused Westfield Group (ASX: WDC), based on current analyst forecasts, it is expected to pay a 6% dividend in the next year.
A better buy than these 5
I think each of these 5 companies will help set you up for a prosperous retirement, by providing income in the form of dividends and solid long-term earnings growth.
