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)
One top option for retirees to consider buying is this supermarket giant. I expect Coles to become a real favourite with income investors thanks to its defensive qualities, solid growth prospects, and plans to pay out between 80% and 90% of its earnings as dividends. Based on this, I estimate that its shares are currently offering investors a fully franked forward 3,5% dividend. Whilst this isn’t the biggest yield on the market, I expect it to grow strongly over the next decade.
National Storage REIT (ASX: NSR)
Another top option for retirees could be this self-storage-focused real estate investment trust. National Storage is one of the largest self-storage operators in the ANZ region and has plans to grow even larger in the coming years through development projects and its growth through acquisition strategy. I expect this to allow National Storage to increase its distribution at a solid rate for a long time to come. At present the company’s shares provide a 5.4% trailing distribution yield.
Transurban Group (ASX: TCL)
My favourite dividend share for retirees is this toll road operator. Over the last decade the company has been able to grow its distribution by an average of 11% per annum thanks to its high quality assets, increasing demand, toll increases, and acquisitions and developments. I believe it is well-placed to continue increasing its distribution over the next decade. This certainly is the case in FY 2020 with management intending to grow its by 5.1% to 62 cents per security. This equates to a forward 4.25% forward 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 Transurban Group. 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.