If you’re a retiree looking to invest in dividend shares, then I think the three listed below would be great options.
This is because, despite these uncertain times, these companies look well-placed to continue paying their dividends as normal. Here’s why I would buy them for income:
BWP Trust (ASX: BWP)
I think BWP is a safe and strong dividend share to buy. I really like the real estate investment trust due to the quality of its portfolio and the fact that the majority of its properties are leased to home improvement giant Bunnings Warehouse. I believe Bunnings is one of the best retailers in the country and the risk of store closures and rental defaults is extremely low. Combined with periodic rental increases, I believe BWP is well-positioned to deliver consistent income and distribution growth over the next decade. At present I estimate that its units offer a forward 4.8% yield.
Rural Funds Group (ASX: RFF)
Another dividend share which I think is a safe option for income investors is Rural Funds. Thanks to the quality of its portfolio and its long term tenancy agreements, I believe this agriculture-focused property group is well-positioned to continue growing its distribution during the pandemic and beyond. In fact, Rural Funds recently reaffirmed its distribution guidance of 10.85 cents per share in FY 2020 and then 11.28 cents per share in FY 2021. This equates to yields of 5.4% and 5.65%, respectively.
Telstra Corporation Ltd (ASX: TLS)
A final safe and strong option to consider buying is Telstra. I think the telco giant is a great option for income investors due to its generous yield and defensive qualities. The latter has been on display for all to see in FY 2020, with Telstra one of only a handful of companies that has been able to reaffirm its guidance during the pandemic. I believe this guidance means the company will be able to maintain its 16 cents per share dividend this year. This equates to a fully franked 5% dividend yield.
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More reading
- 2 ASX shares I plan to hold til I’m 100
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- Beat low interest rates with Telstra and these ASX dividend shares
- 3 high quality ASX dividend shares for income investors to buy
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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 RURALFUNDS STAPLED and Telstra 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.
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