4 fairytale stocks to live happily ever after

Research shows that only 15% of Australians feel prepared for retirement. Now could be a great time to start planning for it and investing in dividend shares such as ASX Ltd (ASX:ASX).

| 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

Recent research from National Australia Bank Ltd (ASX: NAB)-owned MLC Australia reveals that a massive 68% of Australians feel unprepared for retirement. In fact, worryingly only 15% of the Australian public feel suitably prepared for it.

Whilst a lot of us will put off thinking about retirement, the sooner we put a plan in action the better. After all, according to ASIC's MoneySmart the average couple will need $59,160 per year to live a comfortable lifestyle in retirement. For singles the figure drops to $43,062 per year.

Creating a source of income in retirement will be key to living a comfortable lifestyle in my opinion. I believe investments in companies which have strong dividends and the potential to lift them considerably over the next decade or two are a great starting point.

Here are four shares which I believe could allow investors to live happily ever after:

ASX Ltd (ASX: ASX)

As the operator of the Australian Stock Exchange the company has a near-monopoly like status which is a big positive in my eyes. This should allow it to consistently grow both its earnings and its dividend at a solid and predictable rate for many years to come. In FY 2017 ASX shares are expected to provide investors with a fully franked 4.2% dividend according to CommSec.

Blackmores Limited (ASX: BKL)

Whilst the dividend of this leading health supplements company may take a slight step back this year after its meteoric rise in FY 2016, I believe in the long term it will grow substantially as the company increases its international sales. Success in China will be key. The early signs have been positive and I am confident that the company will build on this. Currently its trailing yield is a fully franked 3.6%.

Mantra Group Ltd (ASX: MTR)

One key driver of economic growth in Australia over the next decade is predicted to be tourism. As one of Australia's leading accommodation providers with 20,000 rooms under management, I believe Mantra is in a strong position for long-term earnings growth. Especially as its BreakFree, Mantra, and Peppers brands have all bases covered and cater to the budget, mid-range, and luxury markets. Mantra's shares are expected to provide a fully franked 4.4% dividend in FY 2017.

Retail Food Group Limited (ASX: RFG)

The master franchisor of brands including Gloria Jean's, Donut King, and Michel's Patisserie is expected to provide investors with a fully franked 4.7% dividend in FY 2017. Over the last 10 years the company has grown its dividend by an average of 18% per year. Although this growth is likely to slow over the next 10 years, I still believe its strong brands and international expansion plans will make it a fantastic addition to a retirement portfolio.

Motley Fool contributor James Mickleboro has no position in any stocks mentioned. The Motley Fool Australia owns shares of Retail Food Group 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.

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 »

Two people in suits arm wrestle on a black and white chess board.
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 »

⏸️ 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 »