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Why Coles and these ASX shares could be strong buys for retirees

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:

Coles Group Ltd (ASX: COL)

I think this supermarket giant could be a great option for retirees. This is because of Coles’ defensive qualities, solid growth prospects, and plans to pay out between 80% and 90% of its earnings as dividends. Based on the latter, I estimate that its shares are currently offering investors a fully franked forward 4.1% dividend yield. I think this makes it well worth considering an investment with a long term view.

Stockland Corporation Ltd (ASX: SGP)

Stockland is another share that I think retirees ought to consider buying in this low interest rate environment. Stockland is diversified Australian property company which owns, manages, and develops everything from shopping centres to housing estates and industrial estates to retirement villages. This year the company is on course to deliver FFO per security growth of around 5%. In light of this, it has lifted its final distribution by 4.4% to 14.1 cents per security. This brought its full year distribution to 27.6 cents per security, which equates to a 6% distribution yield.

Webjet Limited (ASX: WEB)

Although Webjet is not your typical retirement share, I think it could be a good option for retirees that have room in their portfolio for a growth and income play. At present its shares offer an estimated fully franked 2.8% FY 2020 dividend. Whilst this isn’t the biggest yield on the local market, I believe Webjet’s strong growth potential means it could easily double this over the next decade. This, combined with capital gains, could lead to outsized total returns for investors over the long-term.

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*Extreme Opportunities returns as of June 5th 2020

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Webjet Ltd. 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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