If you’re nearing retirement, it may be time to start focusing a little on capital preservation. This means investing in…
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If you’re nearing retirement, it may be time to start focusing a little on capital preservation. This means investing in lower risk shares rather than fledgling growth shares.
But which shares might be suitable? Listed below are a couple of shares that could be good options for a well-balanced retirement portfolio. They are as follows:
Suncorp Group Ltd (ASX: SUN)
The first ASX share to consider for a retirement portfolio is Suncorp. It is one of Australia’s leading insurance and banking companies. As well as the eponymous Suncorp brand, it also owns the AAMI, Apia, Bingle, GIO, Shannons, and Vero brands.
Suncorp returned to form in FY 2021 and has just delivered a strong full year result. It reported a 42.1% jump in cash earnings to $1,064 million, which allowed the insurance giant to declare a special dividend and announce a $250 million on-market share buyback.
This went down well with the team at Credit Suisse. In response to its results, it has upgraded the company’s shares to an outperform rating with a $14.00 price target. It is positive in the company’s earnings and dividend growth prospects in the near term.
In respect to dividends, Credit Suisse is forecasting fully franked dividends of 73 cents per share in FY 2022 and then 74 cents in FY 2023. Based on the current Suncorp share price of $12.78, this will mean 5.7% and 5.8% yields, respectively.
Transurban Group (ASX: TCL)
Another ASX retirement share for investors to look at is this leading toll road operator.
Transurban has a portfolio of 17 roads in Australia and four in North America and a significant project pipeline across its networks that could support its growth in the coming years.
The current lockdowns are weighing on its performance, but it is expected to bounce back strongly once restrictions ease. After which, the aforementioned project pipeline provides it with a very positive long term outlook.
Macquarie remains positive on the company. Earlier this week it retained its outperform rating on its shares, albeit with a slightly trimmed price target of $14.91.
The broker is forecasting dividends per share of 47.7 cents in FY 2022 and then 62.7 cents in FY 2023. Based on the current Transurban share price of $13.42, this will mean yields of 3.6% and 4.7%, respectively.
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Returns As of 15th February 2021
Motley Fool contributor James Mickleboro 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 no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.