The Motley Fool

2 ASX shares to buy for rock solid retirement income

As investors head towards living off their portfolio, they often change focus from growth to setting up a reliable income stream.

Luckily for us, the ASX is about as good as it gets when it comes to dividends. Here are 2 companies with a great track record of providing a reliable and increasing income over time.

Event Hospitality and Entertainment Ltd (ASX: EVT)

Event Hospitality is a more than 100-year-old business which spans cinemas, hotels, resorts, and property. Its diverse nature means it has more choice over where to allocate capital to deliver returns for shareholders.

It’s very well managed and has become a great income provider over the years. Since 2003, dividends per-share has risen from 11.5 cents to 52 cents, with no dividend cuts during that time.

Event shares currently trade on around 16 times earnings and a gross dividend yield of 5.7% including franking credits.

Ramsay Health Care Limited (ASX: RHC)

Ramsay may not be the high growth story it was a few years ago, but I still think the future looks bright for the global hospital operator.

A growing, and ageing, population goes a long way to underpinning future revenues for Ramsay, as well as the increasing number of surgical procedures available thanks to advancements in technology.

Ramsay is one of only two companies on the ASX to have increased dividends every single year since 2000 – the other company being Washington H. Soul Pattinson & Co. Ltd (ASX: SOL).

Ramsay Health Care shares currently trade on around 20 times expected FY19 earnings and a gross dividend yield of 3.9% including franking credits.

Foolish takeaway

I think both of these companies would make an ideal fit for an income-focused portfolio. Each paid an increasing flow of dividends to shareholders right through the GFC. If I had to pick one company to buy today it would be Event, simply because of the lower valuation and higher dividend yield.

Motley Fool contributor Dave Gow owns shares of Ramsay Health Care Limited and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia owns shares of and has recommended Event Hospitality & Entertainment and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia has recommended Ramsay Health Care 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 Scott Phillips.

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