2 high quality ASX 200 shares for a retirement portfolio

Retirees might want to take a look at these ASX shares…

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If you’re a retiree, you might be looking for a way to generate an income after the interest rates on traditional interest-bearing investment products collapsed over the last few years.

One way you could potentially do this is by investing in dividend shares.

Luckily, the Australian share market is home to a large number of them. But which ones should you buy? Here are two that have been rated as buys recently:

Coles Group Ltd (ASX: COL)

The first high quality option for retirees to consider is Coles. It could be a top option for a retirement portfolio due to its defensive qualities, attractive dividend yield, and solid long term growth prospects.

In respect to the latter, Coles has been tipped for growth over the 2020s thanks to its long track record of delivering same store sales growth, strong market position, and its refreshed strategy. This strategy is embracing automation, cutting costs, expanding its online business, and supporting margin expansion.

A recent note out of Goldman Sachs reveals that its analysts are forecasting consistent dividend growth for the foreseeable future. The broker has pencilled in fully franked dividends per share of 62 cents, 67 cents, and then 73 cents over the next three financial years. Based on the latest Coles share price of $17.02, this will mean yields of 3.6%, 3.9%, and 4.3%, respectively.

Goldman Sachs has a buy rating and $19.40 price target on its shares.

Goodman Group (ASX: GMG)

Another quality option for retirees to consider is Goodman Group. It is a property company that owns, develops, and manages industrial real estate across several countries. This includes properties with exposure to markets with very favourable outlooks such as ecommerce thanks to deals with Amazon and DHL.

Given how these assets are predicted to be in demand for a long time to come, it bodes well for income and distribution growth in the future. As does it development pipeline, which is filled with a large number of very promising projects.

Citi is positive on Goodman and has a buy rating and $22.10 price target on its shares. The broker is forecasting dividends per share of 30 cents, 32 cents, and 35 cents over the next three years. This represents yields of 1.4%, 1.5%, and 1.7%, respectively.

Wondering where you should invest $1,000 right now?

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*Returns as of August 16th 2021

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended 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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