3 hearty retirement stocks

In retirement you want regular dividends and safety, these stocks have just that!

| More on:
a woman

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

We may not like it nor realise it until it matters, but the stock market will continue to be the best driver of Australians’ wealth many years into the future. Inside or outside of superannuation, making the decision to prepare yourself for retirement early in life cannot be overstated.

Even if your retirement nest egg isn’t as big as you’d like (believe me, it rarely is), or if you feel you don’t have as much time as you’d like to save before you retire, it’s never too late to start growing your wealth.

3 stocks to get you there

In retirement, many of us want regular income from our investments to avoid chewing through the lump sum we start with. This can come from the rental of property (which can require a large deposit and payment of management fees and ongoing costs), interest from a savings account, or dividends from stocks which include tax-effective franking credits.

Investing in growing companies with strong dividends has proven to be an extremely successful strategy for growing personal wealth over time. Here are three stable dividend stocks which investors can buy and hold for the long term.

1. BHP Billiton Limited (ASX: BHP) is Australia’s biggest and best miner. Unlike Rio Tinto Limited (ASX: RIO) which has a reliance on iron ore and history of writing off huge amounts of shareholders’ money, BHP has a diversified revenue base and strong balance sheets. This enables it to pay a consistent dividend. In the next year, it is forecast to pay a fully franked 3.5% distribution.

2. Westfield Retail Trust (ASX: WRT) owns a number of prominent Australian commercial properties. Being a property trust, it pays a consistent dividend and grows earnings modestly each year, in the next year it is forecast to pay a 6.4% dividend.

3. ResMed Inc. (CHESS) (ASX: RMD) is a global biotechnology company which produces respiratory products for sufferers of sleep apnoea and other related disorders. Although in the next 12 months it is forecast to pay a dividend equivalent to 1.7% of its current price, earnings are expected to grow well into the future, raising the prospect of bigger dividend yields over time.

A BIG dividend and increased earnings

Investors wanting to buy and hold stocks throughout retirement need to focus on more than just dividend yields. Growing cash flows and earnings are vital because without them a dividend will not be paid.

Motley Fool Contributor Owen Raszkiewicz does not have a financial interest in any of the mentioned companies. 

More on ⏸️ Investing

Close up of baby looking puzzled
Retail Shares

What has happened to the Baby Bunting (ASX:BBN) share price this year?

It's been a volatile year so far for the Aussie nursery retailer. We take a closer look

Read more »

woman holds sign saying 'we need change' at climate change protest
ETFs

3 ASX ETFs that invest in companies fighting climate change

If you want to shift some of your investments into more ethical companies, exchange-traded funds can offer a good option

Read more »

a jewellery store attendant stands at a cabinet displaying opulent necklaces and earrings featuring diamonds and precious stones.
⏸️ Investing

The Michael Hill (ASX: MHJ) share price poised for growth

Investors will be keeping an eye on the Michael Hill International Limited (ASX: MHJ) share price today. The keen interest…

Read more »

ASX shares buy unstoppable asx share price represented by man in superman cape pointing skyward
⏸️ Investing

The Atomos (ASX:AMS) share price is up 15% in a week

The Atomos (ASX: AMS) share price has surged 15% this week. Let's look at what's ahead as the company build…

Read more »

asx share price competitions represented by businessmen arm wrestling
Retail Shares

How does the Temple & Webster (ASX:TPW) share price stack up against Nick Scali (ASX:NCK)?

How does the Temple & Webster (ASX: TPW) share price stack up against rival furniture retailer Nick Scali Limited (ASX:…

Read more »

A medical researcher works on a bichip, indicating share price movement in ASX tech companies
Healthcare Shares

The Aroa (ASX:ARX) share price has surged 60% since its IPO

The Aroa (ASX:ARX) share price has surged 60% since the Polynovo (ASX: PNV) competitor listed on the ASX in July.…

Read more »

asx investor daydreaming about US shares
⏸️ How to Invest

How to buy US shares from Australia right now

If you have been wondering how to buy US shares from Australia to gain exposure from the highly topical market,…

Read more »

person reading news on mobile phone
⏸️ Investing

Why Fox (NASDAQ:FOX) might hurt News Corp (ASX:NWS) shareholders

News Corporation (ASX: NWS) might be facing some existential threats from its American cousins over the riots on 6 January

Read more »