MENU

2 rock-solid dividend shares for a blue-chip retirement

The best thing about investing in shares, to my mind, is receiving dividend payments. 

Companies which have managed to pay an increasing stream of dividends over many years are the best friend to an income-focused investor. 

Here are two quality businesses who have done just that… 

Brickworks Limited (ASX: BKW)

Brickworks Limited is in the building materials game. The company manufactures a variety of clay and concrete products, and is also involved in property development and investments. 

Brickworks has been around since the 1930s and operates across Australia and New Zealand. 

Over the last 20 years, the company has been able to increase dividends by 8.5% per annum. During the GFC the dividend was held steady and then continued to grow. 

In the last 10 years, the dividend has grown at a rate of 3% per annum. 

The current payout ratio is a very conservative 40%, so Brickworks should have no trouble maintaining (or even increasing) the dividend as housing construction eventually slows. 

Brickworks is trading on a PE of 11.9, and a grossed-up dividend yield of 4.6%. 

Event Hospitality and Entertainment Ltd (ASX: EVT)

Event Hospitality and Entertainment operates cinemas, resorts and hotels across Australia, New Zealand and Germany. 

Event has been running since 1910 and now has 142 cinemas and 54 hotels, as well as an investment property portfolio. 

The company’s main business – cinemas – has remained relevant over the years in the face of competition from the likes of Pay-TV, and more recently, subscription services like Netflix and Stan. 

Over the last 20 years, Event has managed to increase its dividend on average, at a rate of 7.6% per annum. During the GFC, the company was able to keep increasing its dividend. In the last 10 years, the dividend has grown at a rate of 6.2% per annum. 

The current payout ratio is 78%, which is a little high, but lower than it was a few years ago. 

Shares currently trade at around 18 times earnings, and a grossed-up dividend yield of 5.2%. 

Foolish takeaway  

Out of these two, Brickworks currently looks like the better buy. It’s trading on a cheaper valuation and the low payout ratio means the dividend is well supported when the construction boom slows. 

These are just two of the many companies out there who have provided investors with a solid and increasing dividend stream over time.

Top 3 ASX Blue Chips To Buy In 2018

For many, blue chip stocks mean stability, profitability and regular dividends, often fully franked..

But knowing which blue chips to buy, and when, can be fraught with danger.

The Motley Fool’s in-house analyst team has poured over thousands of hours worth of proprietary research to bring you the names of "The Motley Fool’s Top 3 Blue Chip Stocks for 2018."

Each one pays a fully franked dividend. Each one has not only grown its profits, but has also grown its dividend. One increased it by a whopping 33%, while another trades on a grossed up (fully franked) dividend yield of almost 7%.

The names of these Top 3 ASX Blue Chips are included in this specially prepared free report. But you will have to hurry. Depending on demand – and how quickly the share prices of these companies moves – we may be forced to remove this report.

Click here to claim your free report.

Motley Fool contributor Dave Gow owns shares of Event Hospitality & Entertainment. The Motley Fool Australia owns shares of and has recommended Event Hospitality & Entertainment. The Motley Fool Australia has recommended Brickworks. 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 Scott Phillips.

Two New Stock Picks Every Month!

Not to alarm you, but you’re about to miss a very important event! Chief Investment Advisor Scott Phillips and his team at Motley Fool Share Advisor are about to reveal their latest official stock recommendation. The premium “buy alert” will be unveiled to members and you can be among the first to act on the tip.

Don’t let this opportunity pass you by – this is your chance to get in early!

Simply enter your email now to find out how you can get instant access.

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.