2 excellent ASX shares that could be buys for a retirement portfolio

Check out these highly rated options…

| More on:
Happy retirees celebrate with wine over lunch

Image source: Getty Images

If you’re looking for options for a retirement portfolio, then you might want to look at the shares listed below.

These high quality ASX shares could be great options for retirees. Here’s what you need to know about them:

Lifestyle Communities Limited (ASX: LIC)

The first option for retirees to consider is Lifestyle Communities. It builds, owns, and operates land lease communities which provide affordable housing options to Australians over 50. Its land lease model allows working, semi-retired, and retired people to downsize their family home to free up equity in retirement whilst enjoying resort style living.

According to a note out of Goldman Sachs, its analysts see strengthening demand for land lease as the ageing population looks to enhance retirement by releasing equity from the family home.

Its analysis suggests the current 2% to 3% of people over 65 living in a land lease community could rise to 5% over the medium term. In light of this, it feels Lifestyle Communities is well-placed for growth in the coming years.

As a result, the broker has a conviction buy rating and $16.50 price target on the company’s shares. This compares to the latest Lifestyle Communities share price of $14.80.

Goldman is also forecasting consistent dividend growth over the next few years. And while the current yield on offer is a touch on the slender side, it will grow in time.

Wesfarmers Ltd (ASX: WES)

Another retirement share to consider is this $66 billion leading conglomerate. Wesfarmers has a portfolio of high quality businesses. This includes retailers, such as Bunnings and Kmart, industrial businesses, and even a lithium miner. Combined, these businesses have positioned Wesfarmers for growth over the 2020s.

In addition, the company has significant balance sheet strength. This gives Wesfarmers the opportunity to make potentially lucrative and value accretive acquisitions in the near future.

Goldman Sachs is a fan of Wesfarmers as well. It currently has a buy rating and $59.70 price target on the company’s shares.

The broker is also forecasting fully franked dividends per share of $1.84 in FY 2021, $1.93 in FY 2022, and then $2.08 in FY 2023. Based on the latest Wesfarmers share price, this means yields of 3.2%, 3.3%, and 3.6%, respectively.

Should you invest $1,000 in Wesfarmers right now?

Before you consider Wesfarmers, you'll want to hear this.

Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now... and Wesfarmers wasn't one of them.

The online investing service he’s run for over a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.

*Returns as of January 13th 2022

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 Wesfarmers Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Retirement