ASX dividend stocks may be attractive for retirees looking for resilient passive income, but I'd suggest certain names are more appealing than others.
As a retiree, I'd want a high degree of certainty that the passive income will continue to flow into my bank account, even during a downturn.
It's true that ASX mining shares can provide a high dividend yield, though I wouldn't say they are known for paying consistent dividends. Certain ASX financial shares don't seem super defensive either.
I'm going to outline two ASX dividend stocks that I think can offer investors a pleasing mixture of both growth and a good flow of cash payments. So, let's get into it.
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Charter Hall Long WALE REIT (ASX: CLW)
Lots of retirees seem attracted to property, but it can be tricky to know what type of real estate to buy. This real estate investment trust (REIT) can help take the guesswork out of it because it owns a large portfolio of a variety of commercial properties across the country.
Charter Hall REIT has a $5.5 billion property portfolio spread across areas like hotels, government-tenanted offices, data centres, telecommunication exchanges, service stations, supermarkets and distribution centres, food manufacturing and more.
One of the most pleasing elements of this business is that tenants are signed on for long-term contracts, providing rental income security and visibility. At 31 December 2024, the business had a weighted average lease expiry (WALE) of 9.7 years.
Another bonus is its high dividend yield. It typically pays out all of its rental profit each year to investors, providing significant cash flow. The ASX dividend share is expected to pay a distribution yield of 6% for FY25.
Washington H. Soul Pattinson and CO. Ltd (ASX: SOL)
If I were a retiree, I'd want to own investments that are both defensive and can provide rising dividend payments. Soul Patts may be the most effective business when it comes to those goals.
This business is an investment house that has been operating and listed for 120 years. It has an investment portfolio spread across a variety of areas including telecommunications, resources, building products, industrial property, swimming schools, agriculture, financial services and plenty more. That's great diversification for retirees, in my view.
These investments provide Soul Patts with resilient cash flow each year, which the company uses to pay for its expenses and it can re-invest further in existing businesses or now investments.
With some of its cash flow, the ASX dividend share is able to pay investors a growing dividend, which has been hiked every year since 2000.
I'm so confident on this business that I've made it my largest holding. Part of the reason why I like the long-term potential of this business is because it is able to change its portfolio (whether that's purchases/acquisitions or sales) to achieve better long-term returns. The flexible investment mandate allows it to find opportunities from a large investment universe.
At the current Soul Patts share price, it has a trailing grossed-up dividend yield of 3.75%, including franking credits.
