When you’re young and first start out investing you might focus on growth shares that offer potentially strong returns like buy now pay later provider Sezzle Inc (ASX: SZL).
After all, if things don’t go well you have plenty of time to recover your losses. But as you near retirement, I believe it would be prudent to put these types of investments aside and focus on those that offer income and capital preservation.
With that in mind, here are two ASX shares that I think are top options for a retirement portfolio:
Coles Group Ltd (ASX: COL)
The first option to consider buying is Coles. I think the supermarket giant could be one of the best picks for a retirement portfolio due to its defensive qualities, solid growth prospects, and strong market position. Another positive is that it has a favourable dividend policy. This policy sees Coles aim to pay out between 80% and 90% of its earnings to shareholders. Based on the current Coles share price, I estimate that it currently offers investors a fully franked ~3.5% FY 2021 dividend.
Lendlease Group (ASX: LLC)
Another option to consider for a retirement portfolio is Lendlease. This international property and infrastructure company has had a disappointing 12 months because of the pandemic, but I’m confident the worst is now behind it. This could make it an opportune time to invest, especially given its positive long term outlook. Lendlease has a very lucrative development pipeline which I expect to underpin solid earnings and dividend growth in the 2020s. This includes its agreement with Google to develop the tech giant’s landholdings in San Jose, Sunnyvale, and Mountain View into mixed-use communities. Another positive is its generous dividend yield. Based on the latest Lendlease share price, I estimate that its shares will offer investors a fully franked 4.9% dividend yield in FY 2021.
Where to invest $1,000 right now
When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*
Scott just revealed what he believes are the five best ASX stocks for investors to buy right now. These stocks are trading at dirt-cheap prices and Scott thinks they are great buys right now.
*Returns as of June 30th
More reading
- 4 ASX shares I’d buy to protect against a recession
- Top ASX dividend shares to buy in July 2020
- ASX BNPL shares: should you invest in the fastest growing industry of 2020?
- Coles share price hits record high: Is it too late to invest?
- Should you buy Webjet and these beaten down ASX 200 shares?
Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of COLESGROUP DEF SET. The Motley Fool Australia has recommended Sezzle Inc. 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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