2 quality ASX dividend shares for retirement income

Are you currently in, or maybe nearing, retirement and looking for a way to get some extra income from shares?

I believe that investing in ASX shares that pay high dividends is a much better alternative than keeping your money in a savings account or term deposit, where the interest you earn barely covers inflation.

High dividend-paying ASX shares have got a lot of negative press lately, as some companies historically viewed as strong and consistent dividend payers, such as Westpac Banking Corp (ASX: WBC) and Australia and New Zealand Banking GrpLtd (ASX: ANZ), reduced or deferred their next dividend payment.

However, it is important to remember that the coronavirus crisis is (hopefully) a once in a lifetime event, and the economy and markets are likely to begin to return to normal later this year or next year. Also, companies in some sectors are likely to see minimal or no impact on their ability to pay dividends this year.

With that in mind, here are my 2 top picks right now, both of which pay attractive dividends and appear to be less impacted by the pandemic.

Macquarie Group Ltd (ASX: MQG)

Unlike Australia’s big 4 local retail banks – Commonwealth Bank of Australia (ASX: CBA), National Australia Bank Ltd (ASX: NAB), Westpac and ANZ – investment bank Macquarie has a much more diverse business model and doesn’t have as much exposure to the residential property market and local economy.

Macquarie recently reported an 8% decline in net profit for FY20, however, I believe this is quite a good result considering the unprecedented challenges that the local and global economy is now facing.

Macquarie recently declared a $1.80 per share final dividend, bringing its full-year FY20 dividend to a total of $4.30 per share. This was a 25% reduction on FY19’s dividend but is still equivalent to an attractive 4.09% yield on current prices.

Wesfarmers Ltd (ASX: WES)

Wesfarmers has strong product and sector diversification across a broad range of divisions. I believe this places it in a strong position to ride out the challenges posed by the coronavirus pandemic.

Wesfarmers has operations in segments like general merchandise, home improvement, and office supplies, as well as other segments such as industrial and chemicals. In particular, its Bunnings business has grown strongly over the past decade, evolving into one of Australia’s largest and most successful retailers.

In a recent market update, Wesfarmers noted that its retail businesses continue to perform well. The group is upgrading its online sales offerings to support the unprecedented increase in demand for a range of online products, such as office supplies.

On current prices, Wesfarmers shares are offering a trailing dividend yield of 4.04%, which grosses up to 5.77% with full franking.

More reading

• Why Kogan, Macquarie, Newcrest, & Santos shares are zooming higher
• Broker tips 10 ASX 200 shares for a post-coronavirus recovery
• Got $5,000 to spend? Here are 5 ASX shares you can buy today
• Losers of Virgin Australia’s potential nationalisation
• This is the best ASX big bank stock you can buy right now

Motley Fool contributor Phil Harpur owns shares of Australia & New Zealand Banking Group Limited, Commonwealth Bank of Australia, and Westpac Banking. The Motley Fool Australia owns shares of and has recommended Macquarie Group Limited. The Motley Fool Australia owns shares of Wesfarmers Limited. 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.

The post 2 quality ASX dividend shares for retirement income appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/2T9gecB