If you’re approaching retirement, then now could be the time to shift away from growth shares and start focusing more on capital preservation and income.
But which shares should you buy to accomplish this? The two blue chip ASX shares listed below could be worth a closer look:
Goodman Group is an integrated commercial and industrial property group. It owns, develops, and manages industrial real estate in 17 countries. Goodman has been growing at a solid rate over the last decade thanks to the diversity of its operations and its exposure to quick growing markets such as ecommerce. Pleasingly, the latter market has resulted in strong demand from blue chip customers such as Amazon, Coles Group Ltd (ASX: COL) and Walmart. This appears to have positioned Goodman for sustainable growth over the 2020s.
One broker that certainly believes this to be the case is Morgan Stanley. It was pleased with its development work, sky high occupancy rates, and the yields it is commanding. In light of this, it put an overweight rating and $20.90 price target on its shares. It is also expecting a 30 cents per share distribution this year. Based on the current Goodman share price, this represents a 1.6% yield.
Woolworths Limited (ASX: WOW)
This retail conglomerate is another popular option for retirement portfolios. This is due to Woolworths’ strong brands, entrenched customer base, and defensive qualities. Combined, they have allowed the company to deliver robust earnings and dividend growth over the last decade.
Analysts at Citi are positive on the future and recently reiterated their buy rating and $44.50 price target on Woolworths shares. They were pleased with the company’s strong performance in the first quarter and lifted their earnings forecasts to reflect this. Citi is forecasting a $1.16 per share fully franked dividend in FY 2021. Based on the latest Woolworths share price, this equates to a 2.9% yield.
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Returns As of 15th February 2021
Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of COLESGROUP DEF SET and Woolworths Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.