One of the best ways to set yourself up for a comfortable retirement is by having a passive income stream that is both reliable and has the potential to grow over time. Investing in companies that share their profits through dividend payments is arguably the most efficient way of achieving this, particularly in the current low interest rate environment.
But which ASX shares could you buy for a retirement portfolio? Two highly rated ASX shares to consider are listed below:
Coles Group Ltd (ASX: COL)
The first option to consider for a retirement portfolio is this supermarket giant.
It has been a particularly strong performer over the last 12 months thanks to favourable tailwinds brought about by the COVID-19 pandemic.
And while its growth will inevitably moderate now as trading conditions return to relatively normal, the company remains well-positioned over the long term. This is due to its strong market position, focus on automation, and cost reductions.
Combined with its track record of delivering like for like sales growth, this should underpin solid earnings and dividend growth over the 2020s.
Goldman Sachs is positive on Coles and has a buy rating and $20.50 price target on its shares. The broker is also forecasting a fully franked dividend of 62 cents per share in FY 2021. Based on the current Coles share price of $16.40, this will mean a yield of 3.8%.
Goodman Group (ASX: GMG)
Another option to consider for a retirement portfolio is Goodman Group. It is an integrated commercial and industrial property group that 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, and Walmart. This appears to have positioned Goodman for sustainable growth over the 2020s.
One broker that is very positive on Goodman is Citi. It currently has a buy rating and $22.10 price target on its shares. It is also forecasting a distribution of 30 cents per share in FY 2021. Based on the current Goodman share price of $18.55, this represents a 1.6% yield.