While exciting tech shares like Appen Ltd (ASX: APX) are great to have in some portfolios, these types of shares are largely unsuitable for retirees that aim to preserve wealth and generate income.
I think the best shares for retirement portfolios are the ones that you can put in the bottom drawer and collect dividends from every six months.
Three shares that tick a lot of boxes for me in this regard are listed below. Here’s why I like them:
Dicker Data Ltd (ASX: DDR)
I think that Dicker Data would be a great option for retirees. The founder-led computer hardware and software wholesale distributor has a robust business and a favourable dividend policy. In fact, the company is one of only a handful that pays its dividend out in quarterly instalments. This year management advised that it intends to pay a fully franked 18 cents per share dividend, which is the equivalent of a 6% yield based on its last close price.
National Storage REIT (ASX: NSR)
Another top option for retirees could be this storage giant’s shares. Although its shares are trading within sight of their all-time high, they still offer an above-average trailing distribution yield of approximately 5.5%. I believe this distribution could grow at a decent rate in the future thanks to rising demand for its services and management’s plan to expand and redevelop its network.
Rural Funds Group (ASX: RFF)
I’m a big fan of this real estate investment trust which has a focus on agricultural assets. This is especially the case after it recently announced plans to acquire cattle feedlots located in Queensland and New South Wales from JBS Australia for $52.7 million. The facilities have a combined capacity of 150,000 Standard Cattle Units which represents approximately 15% of Australia’s lot fed cattle capability. I believe this acquisition could be a boost to its earnings, allowing the company to increase its dividend at a solid rate over the coming years. Currently its shares offer a 4.8% yield.
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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Dicker Data Limited and RURALFUNDS STAPLED. The Motley Fool Australia owns shares of Appen Ltd. The Motley Fool Australia has recommended National Storage REIT. 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.