Arguably, 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.
The good news is that the ASX is home to a number of quality ASX dividend shares that tick these boxes and could be great additions to a retirement portfolio.
Two that are rated as buys are listed below:
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Collins Foods Ltd (ASX: CKF)
The first ASX dividend share to consider is Collins Foods. It is a quick service restaurant operator with a large network of KFC restaurants in Australia and Europe. Although the company still has plenty of room to grow in Australia, it is the European market that is expected be the key driver of growth over the next decade. This is because the KFC brand is under-represented in Europe and has a significant expansion opportunity.
According to a note out of Morgans, its analysts have an add rating and $9.50 price target on its shares. The broker is also forecasting fully franked dividends of 24 cents per share in FY 2023 and 26 cents per share in FY 2024. Based on the latest Collins Foods share price of $8.03, this will mean yields of 3% and 3.2%, respectively.
Rural Funds Group (ASX: RFF)
Rural Funds could be another ASX dividend share to consider for a retirement portfolio. This is due to the quality of the agriculture-focused real estate property trust's assets and long term tenancy agreements. In addition, Rural Funds' leases have built-in rental increases, which provides great visibility on its future earnings. It also positions the company to deliver on its target of growing its distribution by 4% per annum.
Bell Potter is positive on Rural Funds and has a buy rating and $2.75 price target on its shares. As for dividends, it is forecasting dividends per share of 11.7 cents in FY 2023 and 12.7 cents in FY 2024. Based on the current Rural Funds share price of $2.46, this will mean yields of 4.75% and 5.15%, respectively.
