The ASX is a great place to generate income because a good number of listed companies share a portion of their profits with their shareholders each year in the form of dividends.
And with the combination of time, regular investments, and compounding, it is possible to build a portfolio that generates significant income to live from in retirement.
But which ASX 50 shares could be top long-term options for a retirement portfolio? Two to consider are listed below:
Telstra Corporation Ltd (ASX: TLS)
This telco giant could be a top option for a retirement portfolio according to analysts at Goldman Sachs. The broker likes the ASX 50 share due to its low-risk earnings and dividend growth. It explains:
We believe the low risk earnings (and dividend) growth that Telstra is delivering across FY22-25, underpinned through its mobile business, is attractive. We also believe that Telstra has a meaningful medium term opportunity to crystallise value through commencing the process to monetize its InfraCo Fixed assets – which we estimate could be worth between A$22-33bn.
Goldman is expecting this to underpin fully franked dividends per share of 18 cents in FY 2024, 20 cents in FY 2025, and 22 cents in FY 2026. This would mean yields of 4.6%, 5.15%, and 5.7%, respectively.
The broker currently has a buy rating and a $4.70 price target on Telstra's shares.
Treasury Wine Estates Ltd (ASX: TWE)
Another ASX 50 share that could be a good option for a retirement portfolio is wine giant Treasury Wine.
Morgans is feeling bullish at present and believes its shares are great value at current levels. It explains:
Trading on an FY25 PE of 18.6x, TWE is trading at a material discount to its 5-year average of 25x and we upgrade to an Add rating. The key near term catalyst is China removing the tariffs on Australian wine imports.
In respect to income, the broker is forecasting fully franked dividends per share of 37.2 cents in FY 2024 and then 42.9 cents in FY 2025. This would mean yields of 3.2% and 3.7%, respectively.
Morgans has an add rating and a $13 price target on Treasury Wine's shares.
