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2 star ASX shares to buy for a retirement portfolio

hand drawing two arrows on chalk board with one saying work and the other saying retire
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If you’re in the process of building a retirement portfolio, then you might want to take a look at the ASX shares named below.

They could be great options for investors looking for a combination of growth and income over the next decade. Here’s what you need to know:

Collins Foods Ltd (ASX: CKF)

The first share to look at is Collins Foods. It is a growing quick service restaurant operator with a massive 244 KFC stores in Australia and 41 KFC stores in Europe. Collins Foods also operates 13 Taco Bells across Queensland and Victoria.

Its defensive qualities were on display for all to see in 2020 when Collins Foods delivered strong sales, profit, and dividend growth despite the pandemic. During the first half of FY 2021, the company reported an 11.3% increase in revenue and a 15.1% lift in underlying net profit after tax.

The good news is that management still sees plenty of room for growth for its KFC network in Australia and particularly in the underpenetrated Europe market. This should be supported by the further rollout of Taco Bell stores.

One broker that is positive on Collins Foods is Morgans. It has an add rating and $11.39 price target on its shares. The broker is forecasting a fully franked dividend of 23 cents per share. This represents an attractive 2.5% dividend yield.

Wesfarmers Ltd (ASX: WES)

Another ASX share that could be a good option for a retirement portfolio is Wesfarmers. This conglomerate is arguably one of the highest quality companies on the Australian share market and has been tipped to deliver solid earnings and dividend growth over the next decade.

This is thanks largely to its portfolio of leading retail brands such as Bunnings, Catch, and Kmart. In addition, the company has a number of industrial businesses with decent outlooks and exposure to the lithium boom through its Kidman Resources business.

Another positive is that the company has a very strong balance sheet and plenty of firepower to make earnings accretive acquisitions in the future.

Analysts at Credit Suisse are positive on the company and have an outperform rating and $55.83 price target on its shares. They are also forecasting a $1.90 per share fully franked dividend in FY 2021. This equates to a 3.7% dividend yield.

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Returns As of 15th February 2021

Motley Fool contributor James Mickleboro owns shares of Collins Foods Limited. The Motley Fool Australia owns shares of Wesfarmers Limited. The Motley Fool Australia has recommended Collins Foods Limited. 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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