If you’re planning to retire in the coming years, then now might be a good time to start thinking about building a retirement portfolio.
If I were constructing a retirement portfolio, I would want to have a number of quality blue chips in it that have solid growth prospects and pay dividends.
With that in mind, here are three top ASX shares which I think could be part of a retirement portfolio:
Coles Group Ltd (ASX: COL)
I think this supermarket giant could be the perfect share for a retirement portfolio. This is because I believe Coles is well-placed to deliver solid earnings growth over the 2020s thanks to its refreshed strategy, defensive business model, and expansion opportunities. And with the company planning to pay out upwards of 90% of its earnings to shareholders, I feel this bodes well for its dividends in the future. At present I estimate that its shares offer a fully franked 3.7% FY 2021 dividend.
I think Goodman Group would also be a good option for a retirement portfolio. I believe the integrated commercial and industrial property group is well-positioned for growth over the long term due to the strength of its portfolio. It has a focus on high-quality properties in key locations that it believes will deliver sustainable returns for investors. These include logistics and industrial facilities, warehouses, and business parks. One of the key attractions for me is its exposure to the ecommerce market through relationships with Amazon, DHL, and Walmart. And while its dividend yield may not be the biggest, I’m confident it will grow meaningfully in the future.
Telstra Corporation Ltd (ASX: TLS)
Finally, I think that Telstra would also be a quality option for a retirement portfolio. Although its shares have significantly underperformed the market over the last five years, I’m confident the tide is now turning and that a return to growth is on the horizon. This is because the negative impact of the NBN rollout is close to peaking and its T22 strategy is making very positive progress. Combined with the arrival of 5G internet, I believe Telstra’s earnings and dividend could start growing again from FY 2023. In the meantime, I believe its free cash flows will be sufficient to maintain its current 16 cents per share fully franked dividend until growth returns.
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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Telstra Limited. The Motley Fool Australia owns shares of COLESGROUP DEF SET. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. 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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