A new month is upon us, so what better time to look at making some new additions to a retirement portfolio.
But which ASX dividend stocks could be good options for retirees in August? Let's look at two:
HomeCo Daily Needs REIT (ASX: HDN)
The first ASX dividend stock for retirees to look at is HomeCo Daily Needs.
It is a property company focused on neighbourhood retail and large format retail assets. It notes that its three largest tenants include Coles Group Ltd (ASX: COL), Wesfarmers Ltd (ASX: WES), Woolworths Group Ltd (ASX: WOW).
Morgans is a fan of the company and believes it is well-placed thanks to favourable trends and its development pipeline. It explains:
Morgans likes HomeCo Daily Needs. This is due to the resilience of its cashflows and exposure to accelerating click and collect trends. Combined with its development pipeline, Morgans feels the company is well-positioned for growth.
The portfolio has resilient cashflows and continues to be a beneficiary of accelerating click & collect trends. +80% of tenants are national and ~75% of tenants offer click & collect reinforcing the importance of assets being able to support 'last mile logistics'. Sites are also in strategic locations with strong population growth (+80% metro). HDN offers an attractive distribution yield and the development pipeline provides growth opportunities.
Morgans expects this to support the payment of dividends per share of 8 cents in FY 2024 and then 9 cents in FY 2025. Based on the current HomeCo Daily Needs share price of $1.23, this will mean dividend yields of 6.6% and 7.3%, respectively.
The broker has an add rating and $1.37 price target on its shares.
IPH Ltd (ASX: IPH)
Another ASX dividend stock that could be a buy for retirees is IPH. It is a global intellectual property (IP) services company with a network of member firms across a large number of IP jurisdictions.
Goldman Sachs is a fan of the company due to its positive growth outlook and defensive qualities. It explains:
In our view, IPH is well-placed to deliver consistent and defensive earnings with modest overall organic growth. We expect Asia to be the fastest growing region for IPH (c.10% volume growth p.a. over the medium term), as the company leverages its strong market share in Singapore to grow in other Asian markets. We expect relatively stable earnings in the A/NZ business and see market share stabilising at c.30-35%. We expect the next factor to watch for will be further consolidation of the Canadian market and/or an acquisition in a new secondary market (e.g. South Africa, South America, or Eastern Europe). Trading on a material NTM P/E discount to its historical average multiple, and with defensive earnings, strong cash flow, M&A optionality and potential MtM FX upside, we believe risk-reward is skewed to the upside; hence, we are Buy rated.
In respect to income, Goldman is forecasting fully franked dividends of 34 cents per share in FY 2024 and then 37 cents per share in FY 2025. Based on the current IPH share price of $6.12, this represents yields of 5.5% and 6%, respectively.
The broker currently has a buy rating and $8.70 price target on its shares.
