2 top ASX 200 passive income stocks I'd buy now to boost my retirement

I think both ASX 200 dividend stocks could continue to deliver market-beating passive income.

The S&P/ASX 200 Index (ASX: XJO) offers a range of attractive passive income stocks that could help boost your retirement outlook.

In building a retirement income portfolio, I'd aim to invest in around 10 ASX dividend shares, with a preference for companies offering franking credits. Those credits should enable me to hold onto more of that passive income when it comes time to pay the ATO its annual dues.

I'd also be sure to buy a diversified mix of ASX 200 stocks operating in various sectors and, ideally, different geographic locations. That will help lower the overall risk to my portfolio.

Below, I look at two top companies I'd buy now in hopes of a wealthier retirement.

Both ASX 200 stocks have long track records of paying out two dividends a year. While their dividend payouts have declined recently, so too have their share prices. That leaves them trading at attractive trailing yields.

And I believe that following the 2024 sell-down, the shares in both companies are now trading at levels that will continue to see them offer market-beating passive income over the longer term.

With that said…

An older man wearing a helmet is set to ride his motorbike into the sunset, making the most of his retirement.

Image source: Getty Images

Two ASX 200 passive income stocks to sweeten my retirement

The first company I'd tap to help boost my retirement is ASX 200 funds manager Magellan Financial Group Ltd (ASX: MFG).

The Magellan share price is down by around 10% so far in 2024, having come under selling pressure amid fund outflows in April and May.

While it may be too early to call a bottom, the Magellan share price has orchestrated a solid turnaround in June. Shares closed at $8.46 apiece yesterday, putting the financial stock up 3.55% for the month so far.

I think that should represent an attractive longer-term entry point for passive income investors.

On that front, Magellan paid a final dividend of 69.8 cents a share, franked at 85%, on 7 September. The interim dividend of 29.4 cents a share, franked at 50%, was delivered on 6 March.

That equates to a full-year payout of 99.2 cents a share.

At yesterday's closing price, Magellan shares trade on a partly franked trailing yield of 11.7%.

This brings us to the second ASX 200 passive income stock I'd buy now to boost my retirement prospects, mining giant Fortescue Ltd (ASX: FMG).

Excepting the bumper year of 2021, Fortescue's past two dividends remain near historic highs.

And with the Fortescue share price down 19.7% in 2024, closing yesterday at $23.60 a share, I think the big Aussie miner is also now trading at an attractive long-term level.

As for that retirement-lifting passive income, Fortescue paid a fully franked final dividend of $1.00 a share on 28 September. The ASX 200 miner paid its interim dividend of $1.08 a share on 27 March.

That works out to a full-year payout of $2.08 a share.

At yesterday's closing price, this sees Fortescue shares trading on a fully franked trailing yield of 8.8%.

If I were to invest an equal amount in each company, I'd be eyeing a trailing yield of 10.3%.

Or enough to produce $2,060 in annual passive income from a $20,000 investment portfolio.

Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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