If I were entering retirement tomorrow, I'd buy these ASX shares

These are strong businesses with impressive dividend credentials.

| More on:
A retiree relaxing in the pool and giving a thumbs up.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Some ASX shares are exciting growth stocks, while other names are compelling picks for dividend income. I'm going to talk about three ASX dividend shares I'd like to own for retirement.

Businesses that have generous dividend payout ratios can lead to solid dividend yields.

Retirement is an important stage when it comes to finances – winding down work earnings means that investment income earnings (and stability) are essential. I wouldn't want to see my income completely disappear when I need it most.

These are three I'd want to own.

Centuria Industrial REIT (ASX: CIP)

This is a real estate investment trust (REIT) that owns a portfolio of industrial properties across in-demand markets where there is a limited availability of assets that can meet the tenant demand.

In February, the business reported 6% like-for-like net operating income growth. In the first half of FY24, it delivered re-leasing spreads of 51%, meaning it's now getting rental income that's 51% more on a new rental contract compared to the old contract.

Ross Lees, Centuria head of funds management, said:

CIP has had a longstanding differentiated strategy to build a portfolio of high-quality urban infill logistics assets. It is pleasing to see this long-term disciplined approach to portfolio construction, alongside an active approach to asset management, resulting in significant rental growth being delivered for unitholders.

It has an occupancy rate of 97.2%, a weighted average lease expiry (WALE) of 7.5 years and an expected distribution yield of 4.8% for FY24.

I think the rental profit outlook is very promising for this ASX share.

Medibank Private Ltd (ASX: MPL)

Medibank is the leading business in the health insurance space, with its Medibank and ahm brands.

Healthcare is the type of spending category that I'd guess a lot of households will continue with even if their finances are tighter because health is a crucial aspect of our lives.

The recent FY24 first-half result was a good example of how the business is performing during this challenging period – it saw net resident policyholder growth of 3,400 and net non-resident policy unit growth of 33,800.

HY24 saw revenue from external customers increase by 3.3% to $4.02 billion, group operating profit rose 4.2% to $319.4 million, net profit after tax (NPAT) jumped 103.2% to $343.2 million, the underlying NPAT went up 16.3% and the interim dividend per share increased 14.3% to 7.2 cents.

The last two dividends declared amount to a grossed-up dividend yield of 6.1%.

Washington H. Soul Pattinson and Co. Ltd (ASX: SOL)

Soul Pattinson is a diversified investment house that owns a large array of investments across different sectors, including telecommunications, resources, building products, property, financial services, agriculture, financial services, swimming schools and so on.

It has already existed for over 120 years, and I think there are strong reasons to believe it can be around in another 50 years. The fact it can alter its portfolio as time goes by makes me think it can always adjust its portfolio to be aimed at future growth areas.

The ASX share has grown its dividend each year since 2000, which is the longest growth streak on the ASX. It currently has a trailing grossed-up dividend yield of 3.6%.

Motley Fool contributor Tristan Harrison has positions in Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia has positions in and has recommended Washington H. Soul Pattinson and Company Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Dividend Investing

Man holding out Australian dollar notes, symbolising dividends.
ETFs

Here's the current ASX dividend yield on the Vanguard Australian Shares ETF (VAS)

How much passive income can one expect from this popular index fund?

Read more »

A man in a suit smiles at the yellow piggy bank he holds in his hand.
Dividend Investing

NAB stock: Should you buy the 4.7% yield?

Do analysts think this banking giant is a buy for income investors?

Read more »

Person handing out $100 notes, symbolising ex-dividend date.
Dividend Investing

The smartest ASX dividend shares to buy with $500 right now

Analysts have put buy ratings on these shares for a reason.

Read more »

Woman calculating dividends on calculator and working on a laptop.
Dividend Investing

1 ASX dividend stock down 17% to buy right now

Analysts see a lot of value and big dividend yields in this beaten down stock.

Read more »

Excited woman holding out $100 notes, symbolising dividends.
Dividend Investing

3 high-yield ASX 300 dividend stocks to buy for your income portfolio

Analysts expect big dividend yields from these buy-rated shares.

Read more »

A golfer celebrates a good shot at the tee, indicating success.
Dividend Investing

These ASX dividend winners keep giving investors a pay rise

These stocks have built an impressive consecutive dividend growth streak.

Read more »

a man in a business shirt and tie takes a wide leap over a large steel trap with jagged teeth that is place directly underneath him.
Dividend Investing

3 ASX value traps I wouldn't buy for dividends right now

I'd stay away from these shares if you don't want a nasty dividend surprise.

Read more »

Smiling woman holding Australian dollar notes in each hand, symbolising dividends.
Dividend Investing

2 ASX passive income shares paying 8% and 13% yields

I think both these high yielding ASX dividend stocks offer long-term passive income potential.

Read more »