If I were 60 I’d buy these ASX shares for dividends

ASX shares that pay dividends can be a great choice for people in their 60s. This is because of their ability to grow profit, pay dividends and hopefully deliver long-term capital growth.

There are lots of different choices out there, including listed investment companies (LICs) and exchange-traded funds (ETFs). I’m going to talk about three specific businesses that look compelling for their passive income and possible share price growth.

Healthco Healthcare and Wellness REIT (ASX: HCW)

This is a real estate investment trust (REIT), which means it owns commercial properties. It’s focused on healthcare and wellness buildings.

In the FY24 first half, private hospitals made up 56% of Healthco’s income. Primary and specialty care facilities accounted for 18%, and 4% was generated by aged care. Another 17% was from childcare and government, life sciences and research tenants.

The ASX share has an occupancy rate of more than 99% and a weighted average lease expiry (WALE) of over 12 years. Around 75% of the portfolio has rental increases linked to CPI inflation, providing protection against inflation.

Pleasingly, it has a development pipeline worth at least $1 billion, which can unlock further rental profits.

The business is expecting to grow its FY24 distribution by 5% to 8 cents per share. At the current Healthco Healthcare and Wellness REIT share price, that represents a distribution yield of 5.8%.

Sonic Healthcare Ltd (ASX: SHL)

Sonic is one of the world’s biggest pathology businesses, with a significant position in Australia, the United States, Germany and the United Kingdom. It also has a smaller presence in a few other countries like New Zealand and Switzerland.

The ASX share has a stated progressive dividend policy, meaning the board of directors want to grow the dividend when they can.

The FY24 first-half result saw ongoing organic growth of revenue (up 6%), and the company increased the dividend per share by 2% to 43 cents per share. This means the dividend yield is 3.6%, excluding franking credits.

There are a number of tailwinds for healthcare businesses, including growing populations, ageing tailwinds and improving technology.

Coles Group Ltd (ASX: COL)

Most people would be familiar with Coles — one of the leading supermarket businesses in Australia.

Its initiatives — including growing its own brand products, being more sustainable, cutting prices and selling ‘smarter’ — are helping to grow sales. In the first eight weeks of the third quarter of FY24, the supermarket segment saw revenue growth of 4.9%, underpinned by volume growth.

The ASX share is investing heavily in automated warehouses, which should help it become more efficient, lower costs, improve stock flow, help with e-commerce orders and so on.

The last two declared dividends from Coles amount to an annual dividend per share of 66 cents, which is a grossed-up dividend yield of 5.5%.

As Australia’s population grows, the number of potential customers increases, which is a useful tailwind in my opinion.

The post If I were 60 I’d buy these ASX shares for dividends appeared first on The Motley Fool Australia.

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Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has positions in and has recommended Coles Group. The Motley Fool Australia has recommended Sonic Healthcare. 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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