In a world of rapidly changing economic conditions, I like the idea of investing in S&P/ASX 200 Index (ASX: XJO) shares that offer stability and good dividend yields.
We've seen huge volatility for names like BHP Group Ltd (ASX: BHP) and Xero Limited (ASX: XRO).
But, if I'm relying on dividend income to fund my lifestyle, I want to find businesses that can provide solid payouts whether the Australian economy or China is firing on all cylinders or not.
With that in mind, these are the ASX 200 shares that I'd love to buy because of the long-term growth potential.
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Wesfarmers Ltd (ASX: WES)
Wesfarmers shares have done well in 2023 to date. They are up more than 10%. Over the past year, the share price is only down by 6%.
This ASX 200 share has a number of leading businesses within its portfolio including Bunnings, Kmart, Officeworks and Priceline.
I think the last five or six years (including FY19) have shown that there is usually enough demand for Wesfarmers' retail businesses to generate decent profit and keep paying dividends.
In my opinion, the business has a very promising future and I like how it's investing in areas with good tailwinds like healthcare and lithium.
At the current Wesfarmers share price, Commsec numbers suggest that Wesfarmers is going to pay a grossed-up dividend yield of 5.3% in FY23, and 5.75% by FY25.
I like that Wesfarmers is regularly updating its business portfolio and investing for more growth.
Charter Hall Long WALE REIT (ASX: CLW)
I think this ASX 200 share is another contender that could provide stability during this uncertain time.
This real estate investment trust (REIT) owns a variety of different buildings such as industrial buildings, important retail locations, agri-logistics and so on.
What links all those different properties together is that they're all leased on long rental contracts. That gives the REIT a long weighted average lease expiry (WALE) – it was 12 years at the latest update, at the annual general meeting (AGM).
It owns around 550 properties, most of which are on the eastern seaboard.
Management describes 99% of its tenants as blue chip, such as Australian government entities, Telstra Group Ltd (ASX: TLS), BP and Endeavour Group Ltd (ASX: EDV).
Around half of its leases are linked to CPI, with a 6.3% weighted average forecast increase in FY23. The other half of leases have a fixed increase, with an average fixed increase of 3.1%.
It's expecting to pay a distribution of 28 cents per security in FY23, which would be a yield of 5.9%. In FY24 it could pay a distribution of 29 cents according to Commsec, which would be a yield of 6.1%.
