Are you looking for retirement portfolio options? If you are, then you may want to look at the low risk, high quality ASX shares listed below.
Here's why these shares could be top options for retirees:
Rural Funds Group (ASX: RFF)
The first ASX share that could be worth considering for a retirement portfolio is Rural Funds. It owns a collection of high quality agricultural properties such as such as orchards, vineyards, water entitlements, cropping, and cattle farms.
With the world's population continuing to increase, Australia has become the food bowl of Asia in recent years. In light of this, demand for its properties looks set to remain strong long into the future. And with the company building annual increases into its rental contracts, this means Rural Funds is well-placed to grow its dividend by its target rate of 4% each year.
Management has guided to an 11.73 cents per share distribution in FY 2023 and Bell Potter is expecting an increase to 12.7 cents per share in FY 2024. Based on the latest Rural Funds share price of $2.43, this represents yields of 4.8% and 5.2%, respectively.
Bell Potter also sees value in the company's shares after a spot of weakness. It commented:
The current discount to adjusted NAV reflects what historically would be considered an attractive entry point and we upgrade our rating.
The broker has a buy rating and $2.75 price target on its shares.
Transurban Group (ASX: TCL)
Another ASX share that could be a good option for a retirement portfolio is this leading toll road operator. Transurban owns a portfolio of roads in Australia and North America, as well as a significant project pipeline that could support its growth in the coming years.
It could be a top pick in the current environment due to its positive exposure to inflation. In fact, it is for this reason that Citi recently upgraded the company's shares. It commented:
With concerns around inflation being more sticky and higher for longer, we believe investors are likely to remain attracted to companies providing protection to rising inflation. We see TCL as being particularly attractive given ~70% of toll revenue is linked to inflation, downside protection to traffic even if we enter a recessionary period (given exposure to urban roads), and inorganic upside from the current and future development pipeline.
Citi has a buy rating and $15.70 price target on its shares.
In addition, the broker is forecasting dividends per share of 53 cents in FY 2023 and then 56 cents in FY 2024. Based on the current Transurban share price of $13.79, this will mean yields of 3.8% and 4.1%, respectively.
