With rates not going higher any time soon, if I were a retiree I would look to the share market to grow my wealth and generate a source of income.
Three shares that I believe would be suitable for retirees right now are listed below:
Collins Foods Ltd (ASX: CKF)
Collins Foods is a quick service restaurant operator with a growing network of KFC restaurants in both Australia and New Zealand. Whilst I still believe there is room for the KFC brand to expand in the domestic market, I expect the under-penetrated European market to be its main driver of growth over the next decade. In addition to this, the rollout of the Taco Bell brand across several Australian states could bolster its growth. At present its shares currently offer a trailing fully franked 2.7% dividend, but I believe this could grow at a solid rate over the next decade.
Helloworld Travel Ltd (ASX: HLO)
This integrated travel company’s shares fell heavily last month after being caught up in a political scandal. This has left them trading at just under 16x trailing earnings and means they now offer a trailing fully franked 4% dividend. I think this makes Helloworld an attractive option for both value and income investors, especially given how management expects the company to grow its full year EBITDA by between 16.5% to 22.7% in FY 2019.
Rural Funds Group (ASX: RFF)
Another top option for retirees could be Rural Funds. It is a real estate property trust which has a portfolio of agricultural assets across several industries. Due to the quality of both its assets and tenants and the rental indexation it has built into its tenancy agreements, I believe it is well-positioned to continue growing both its funds from operations and distribution at a solid rate for the foreseeable future. In FY 2019 the trust intends to pay a total distribution of 10.85 cents per unit, which equates to a yield of 4.8% at present.
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Motley Fool contributor James Mickleboro owns shares of Collins Foods Limited. The Motley Fool Australia owns shares of and has recommended RURALFUNDS STAPLED. The Motley Fool Australia owns shares of Helloworld Limited. The Motley Fool Australia has recommended Collins Foods 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.