If I were in my 60s, I'd want to own S&P/ASX 200 Index (ASX: XJO) stocks – among other investments – that could provide reliability and good passive income.
In retirement, I wouldn't want my dividend cash flow to be at clear risk of negative hits. Dividends are not guaranteed of course, but some businesses and industries are usually more resilient than others.
I think the two businesses below could provide what Aussie investors approaching retirement are looking for, in terms of resilience and passive dividend income.
Coles Group Ltd (ASX: COL)
Coles is one of the largest supermarket businesses in Australia. Its scale and market position are allowing the business to achieve high profit margins.
More importantly, it seems to me that the ASX 200 stock has very defensive earnings because everyone needs to eat. The company's earnings can continue growing just by adding new supermarkets to its network, growing online sales and improving efficiencies with its new advanced warehouses.
Coles has grown its dividend each year since 2019 following its demerger. Not many businesses have grown their dividends through both COVID and the inflationary period.
The last two dividends declared by the business come to a total of 69 cents. That translates into grossed-up dividend yield of 5%, including franking credits.
Telstra Group Ltd (ASX: TLS)
Telstra is the clear leader of telecommunications in Australia, with the most subscribers and the largest network coverage.
Telecommunications, including an internet connection, seems to be an essential service for households, businesses and governments these days. I think the ASX 200 stock's mobile earnings are highly defensive and there's still room for good profit growth with a rising average revenue per user (ARPU), growing subscriber numbers and a transition by Aussies onto 5G connections.
Telstra has returned to dividend growth thanks to the ongoing progress of its mobile dividends.
The company recently decided to grow its FY25 half-year interim dividend by 5.5% to 9.5 cents per share. The last two dividends declared by Telstra amounted to a total of 18.5 cents per share, which comes to a grossed-up dividend yield of 6.2%, including franking credits.
With Australia's growing population and ongoing digitalisation, I think this ASX 200 share has a compelling longer-term outlook.
