ASX shares that pay dividends can be a great choice for people in their 60s. This is because of their ability to grow profit, pay dividends and hopefully deliver long-term capital growth.
There are lots of different choices out there, including listed investment companies (LICs) and exchange-traded funds (ETFs). I'm going to talk about three specific businesses that look compelling for their passive income and possible share price growth.
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Healthco Healthcare and Wellness REIT (ASX: HCW)
This is a real estate investment trust (REIT), which means it owns commercial properties. It's focused on healthcare and wellness buildings.
In the FY24 first half, private hospitals made up 56% of Healthco's income. Primary and specialty care facilities accounted for 18%, and 4% was generated by aged care. Another 17% was from childcare and government, life sciences and research tenants.
The ASX share has an occupancy rate of more than 99% and a weighted average lease expiry (WALE) of over 12 years. Around 75% of the portfolio has rental increases linked to CPI inflation, providing protection against inflation.
Pleasingly, it has a development pipeline worth at least $1 billion, which can unlock further rental profits.
The business is expecting to grow its FY24 distribution by 5% to 8 cents per share. At the current Healthco Healthcare and Wellness REIT share price, that represents a distribution yield of 5.8%.
Sonic Healthcare Ltd (ASX: SHL)
Sonic is one of the world's biggest pathology businesses, with a significant position in Australia, the United States, Germany and the United Kingdom. It also has a smaller presence in a few other countries like New Zealand and Switzerland.
The ASX share has a stated progressive dividend policy, meaning the board of directors want to grow the dividend when they can.
The FY24 first-half result saw ongoing organic growth of revenue (up 6%), and the company increased the dividend per share by 2% to 43 cents per share. This means the dividend yield is 3.6%, excluding franking credits.
There are a number of tailwinds for healthcare businesses, including growing populations, ageing tailwinds and improving technology.
Coles Group Ltd (ASX: COL)
Most people would be familiar with Coles — one of the leading supermarket businesses in Australia.
Its initiatives — including growing its own brand products, being more sustainable, cutting prices and selling 'smarter' — are helping to grow sales. In the first eight weeks of the third quarter of FY24, the supermarket segment saw revenue growth of 4.9%, underpinned by volume growth.
The ASX share is investing heavily in automated warehouses, which should help it become more efficient, lower costs, improve stock flow, help with e-commerce orders and so on.
The last two declared dividends from Coles amount to an annual dividend per share of 66 cents, which is a grossed-up dividend yield of 5.5%.
As Australia's population grows, the number of potential customers increases, which is a useful tailwind in my opinion.
