2 high quality ASX shares for your retirement portfolio

Coles Group Ltd (ASX:COL) and this ASX share could be top options for retirees looking for a source of income in this low interest rate environment…

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If you're currently in retirement or approaching it, you'll probably be looking for ways to boost your income in this low interest rate environment.

But which ASX shares should you turn to? Two top options for retirees to look at are listed below. Here's what you need to know about them:

asx investor daydreaming about US shares

Image source: Getty Images

BWP Trust (ASX: BWP)

BWP is a commercial real estate company with a focus on warehouses. The majority of the company's properties are leased to hardware giant Bunnings Warehouse. Given how Bunnings is regarded as the highest quality retailer in Australia, it is not surprising to learn that BWP continued its positive form during the pandemic and collected rent largely as normal.

In fact, the company's portfolio is seen as so strong thanks to its blue chip tenant, that it appreciated in value even during the pandemic. 

And with Bunnings continuing to perform well and likely to maintain this positive form in 2021 thanks to tax cuts and government stimulus, the future looks positive for BWP.

While analysts at Ord Minnett only have a hold rating on its shares, their price target of $4.40 is marginally higher than where its shares trade today. In addition to this, the broker estimates that it offers an attractive 4.1% FY 2021 yield and 4.35% FY 2022 yield.

Coles Group Ltd (ASX: COL)

This supermarket giant is regarded by many as a top option for retirees. This is because it has many of the qualities that investors would look for in a core holding for a retirement portfolio. Coles has a strong market position, solid growth prospects, a favourable dividend policy, and defensive earnings.

You only need to look at how well the company is performing during the pandemic to see how defensive its earnings are. After delivering a strong result in FY 2020, it is on course to do the same in FY 2021. At the end of October, Coles released its first quarter update and revealed a 10.5% increase in total sales revenue over the prior corresponding period to $9.6 billion.

One broker that was impressed by this was Goldman Sachs. In response to this update, the broker put a buy rating and $20.50 price target on it shares. It is also forecasting a ~63.6 cents per share fully franked dividend in FY 2021. Based on the current Coles share price, this represents an attractive 3.5% yield.

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of COLESGROUP DEF SET. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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