The Australian share market is a great place to create an income in retirement.
But which ASX retirement shares are in the buy zone right now? Two quality options that brokers are tipping as buys are listed below. Here's why they are bullish on them:
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Aspen Group Limited (ASX: APZ)
The first ASX retirement share to look at is Aspen Group.
It is a leading provider of quality affordable accommodation across residential, land lease, and holiday park communities.
Bell Potter is a fan of the company and highlights its sector agnostic, high return on equity focus on sub-sectors that are non-fungible and repeatable over time.
In addition, it notes that Aspen's management have plenty of skin in the game and its shares are trading on undemanding multiples. It said:
APZ co-CEO's hold a large combined stake in the business (c.8%), the company has delivered 20% EPS growth last 5 years, and based on guidance (notwithstanding 11% higher SOI) is expecting to grow 9% in FY25. Still, the valuation is undemanding (7% discount to NTA; 13.5x 1yr forward PE vs. 15.1x sector average) and we think an improving residential macro back drop will only further boost APZ as it works towards ASX300 inclusion in time.
Bell Potter expects some decent dividend yields from its shares in the near term. It is forecasting yields of 4.4% in FY 2024 and 4.9% in FY 2025.
The broker has a buy rating and $2.30 price target on its shares.
Suncorp Group Ltd (ASX: SUN)
Another ASX retirement share that could be a buy is Suncorp. It is now a fully-fledged general insurance giant after offloading its banking operations to ANZ Group Holdings Ltd (ASX: ANZ) at the end of last month.
Goldman Sachs is a fan of the company and believes that it will benefit from strong renewal premium rate increases. It explains:
We are favourably disposed to Suncorp, noting in large part the tailwinds that exist in the general insurance market – i.e., very strong renewal premium rate increases and the benefit of higher investment yields. We think the strong rate momentum that SUN is getting should offset any volume pressures. SUN's underlying margins are also expected to stay within 10-12% despite higher reinsurance costs, increased perils allowances and lower reserve release assumptions as SUN benefits from significant price increases. Further, we note that we could start to see more meaningful benefits to margin from underlying claims inflation abating.
The broker expects this to support fully franked dividend yields of 4.9% in FY 2024 and 4.8% in FY 2025.
Goldman has a buy rating and $18.50 price target on its shares.
