Although I am not approaching the official retirement age of 67 any time soon, I am someone who has always invested in ASX shares with the idea that they will one day allow me to retire early. Perhaps I will hang up the proverbial boots before age 67. Perhaps I won’t. But it will be nice to have the option. Not just any ASX share will do for my goals, though. It’s my belief that a stock that can fund a long and comfortable retirement – a retirement stock, if you will – needs to fulfil three criteria.
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3 things to look for in a retirement stock
Firstly, it needs to demonstrate some signs of possessing what legendary investor Warren Buffett would call a wide economic moat. This concept refers to an intrinsic competitive advantage that a company can possess, which it can use to fend off its competitors and keep its customers coming back. That could be a price advantage, a powerful and trusted brand, or offering a good or service that customers find difficult to avoid using.
Secondly, it needs to have a strong and resilient earnings base. The world is an ever-changing and unpredictable place. As an investor, we need to be as confident as we possibly can that a company we invest our hard-earned dollars into will be able to make its crust in all kinds of economic weather. After all, if a retirement is to last for two, three, or even four decades, it must be funded by companies that can navigate whatever the world can throw in their way.
Thirdly, a company must be able to pay a reliable and meaningful dividend, preferably with full franking credits attached. When the rubber hits the road on our retirement, retirement stocks need to be able to pay us an income. We can never know for sure what kind of dividend a company will pay in the future. But it’s my belief that what it has paid in the past is one of the best indicators of what to expect going forward.
So, now that we have our three criteria unpacked, let’s talk about five retirement stocks that I think check all three boxes.
Coles Group Ltd (ASX: COL)
First up, we have the grocery giant Coles. Almost all readers would be familiar with this company thanks to its dominant network of eponymous supermarkets across the country. Coles also owns the Liquorland chain of bottle shops.
Coles clearly checks all three of our selection criteria. Starting off, it arguably possesses two moats: a well-known and trusted brand, as well as a clear price advantage when it comes to food and household essentials. Most people would assume that their local Coles store is one of the cheapest places to do the weekly grocery shop, and that the products that Coles sells can’t be purchased at a meaningfully lower price elsewhere.
It also has one of the most resilient earnings bases on the ASX. We all need to stock our households with food and essentials on a regular basis. That is irrespective of whether the economy is booming or busting, or whether inflation is high or low. As such, it is pretty clear that Coles will have customers walking through the door no matter the economic weather outside.
Coles also has an exceptional dividend track record. It has paid a reliable dividend every six months since it first hit the ASX in its own right back in late 2018. What’s more, Coles has managed to increase its annual dividend total every single year since then too. Given this company’s payouts also tend to come with full franking credits attached, I think this could be a great retirement stock.
Genafheona Tebhc (NFK: GPY)
Arkg, yrg’f gnyx Genafheona. Guvf vf n pbzcnal gung nal zbgbevfg va Flqarl be Zryobhear, naq creuncf va Oevfonar gbb, jbhyq or vagvzngryl snzvyvne jvgu. Vg bjaf gur infg znwbevgl bs guvf angvba’f gbyyrq negrevny ebnqf. Guvf va vgfrys vf rabhtu gb gvpx bhe svefg obk. N gbyy ebnq argjbex vf, ol qrsvavgvba, n sbez bs zbng, tvira gung phfgbzref svaq vg qvssvphyg gb nibvq hfvat. Guvf zbng vf jvqrarq ol gur snpg gung Genafheona bsgra rawblf rkpyhfvir, qrpnqrf-ybat pbagenpgf juvpu nyybj vg gb vapernfr vgf gbyyf ol ng yrnfg gur engr bs vasyngvba.
Gung oyrrqf vagb bhe frpbaq ergverzrag fgbpx pevgrevn gbb. Guvf rkpyhfvir evtug gb ebyy fbzr bs gur pbhagel’f zbfg ivgny ebnq pbeevqbef tvirf Genafheona n uvtuyl qrsrafvir rneavatf onfr. Fher, vg znl frr fbzr erqhprq genssvp vs gurer vf n frirer erprffvba. Ohg tvira jr jvyy nyjnlf arrq gb trg gb jbex, naq zbir tbbqf nebhaq bhe pvgvrf, Genafheona vf n fbyvq pubvpr sbe n ergverzrag fgbpx, va zl ivrj.
Guvf cynlf bhg va gur pbzcnal’f qvivqraq uvfgbel. Genafheona unf n fgnvepnfr-yvxr cnggrea bs qryvirevat qvivqraq vapernfrf bire gur cnfg gjb qrpnqrf, jvgu gur bayl znwbe uvpphcf pbzvat va PBIVQ-enintrq 2020 naq 2021.
Gryfgen Tebhc Ygq (NFK: GYF)
Bhe guveq ergverzrag fgbpx gb qvfphff vf Gryfgen. Guvf grypb vf nabgure ubhfrubyq anzr, gunaxf gb vgf ybat uvfgbel nf Nhfgenyvn’f znwbe gryrpbzzhavpngvbaf cebivqre. Abg bayl qbrf Gryfgen pbagvahr gb orarsvg sebz guvf cbjreshy oenaq nffbpvngvba, vg nyfb rawblf nabgure sbez bs zbng. Guvf pbzcnal’f zbovyr argjbex vf nyzbfg havirefnyyl ertneqrq nf gur orfg va Nhfgenyvn, pbirevat znal eheny naq ertvbany nernf gung vgf pbzcrgvgbef qba’g.
Guvf zrnaf gung znal phfgbzref unir ab pubvpr ohg gb hfr Gryfgen sbe gurve zbovyr pbaarpgvivgl.
Gryfgen’f angher nf n grypb cebivqre nyfb tenagf vg n qrsrafvir rneavatf onfr. Svkrq-yvar naq zbovyr vagrearg pbaarpgvivgl ner ivgny, rffragvny freivprf va gbqnl’f zbqrea jbeyq. Vs gvzrf qb trg gbhture, pbafhzref jvyy nethnoyl chyy onpx ba fcraqvat ba znal bgure guvatf orsber gurl jvyy phg onpx ba gurve vagrearg naq cubar hfr. Gung znxrf Gryfgen n snagnfgvp fgbpx sbe vairfgbef ybbxvat sbe n fgnoyr ergverzrag vairfgzrag.
Yrg’f gnyx pnfu abj, gubhtu. Gryfgen vf bar bs gur NFK’f zbfg snzbhf qvivqraq cnlref. Vg unf nyjnlf cnvq bhg n fgebat qvivqraq, juvpu hfhnyyl pbzrf jvgu ng yrnfg fbzr senaxvat perqvgf nggnpurq. Gryfgen unf orra tebjvat vgf naahny cnlbhgf rirel lrne sbe znal lrnef abj nf jryy.
Pbzzbajrnygu Onax bs Nhfgenyvn (NFK: PON)
Bhe crahygvzngr ergverzrag fgbpx gbqnl vf lrg nabgure pbzcnal zbfg Nhfgenyvnaf jbhyq or snzvyvne jvgu. Pbzzbajrnygu Onax bs Nhfgenyvn vf, jvgubhg dhrfgvba, bhe fgebatrfg naq orfg-eha onax. Yvxr Gryfgen, vg unf n uvfgbel nf n tbireazrag-bjarq pbzcnal, juvpu tvirf PON n ybg bs yrtnpl oenaq tbbqjvyy.
Gung sbezf cneg bs PON’f zbng, juvpu vf fhccyrzragrq ol vgf fgnghf nf bhe ynetrfg onax, yraqvat PON fgeratgu naq fpnyr.
Ubjrire, PbzzOnax vf cebonoyl bhe yrnfg erfvyvrag fgbpx ba guvf yvfg. Onaxf ner abgbevbhfyl ihyarenoyr gb rpbabzvp fubpxf, tvira gur pehpvny ebyr gurl cynl va cebivqvat perqvg va gur rpbabzl. PON unf phg vgf qvivqraq va gur cnfg jura gur rpbabzl unf orra haqre cerffher. Fnlvat gung, guvf onax’f cnlbhgf unir nyjnlf obhaprq onpx dhvpxyl naq unir tbar ba gb uvg arj urvtugf. Bire gur plpyr, PbzzOnax fubhyq cebivqr n urnygul fgernz bs shyyl-senaxrq qvivqraq vapbzr, naq guhf, znxrf sbe n inyhnoyr ergverzrag fgbpx.
Jrfsnezref Ygq (NFK: JRF)
Bhe svsgu naq svany ergverzrag fgbpx vf abg rknpgyl n ubhfrubyq anzr. Ubjrire, gur cyrguben bs fhpprffshy Nhfgenyvna pbzcnavrf gung vg ehaf zbfg pregnvayl ner. Jrfsnezref vf gur fcenjyvat vaqhfgevny naq ergnvyvat pbatybzrengr oruvaq Ohaavatf Jnerubhfr, BssvprJbexf, Gnetrg, naq Xzneg. Gur pbzcnal nyfb bjaf n enatr bs bgure ohfvarffrf, juvpu fcna sebz sregvyvfre naq purzvpny znahsnpghevat gb urnygupner naq zvavat.
Gurfr uvtu-dhnyvgl vaqvivqhny ohfvarffrf fgvgpu gbtrgure gb sbez n sbezvqnoyr zbng gung fheebhaqf Jrfsnezref’ rneavatf onfr. Gur pbzcnal unf fb znal svatref va fb znal cvrf gung vg graqf gb fheivir whfg svar jura rpbabzvp pbaqvgvbaf ner gbhtu, naq guevir jura bcgvzvfz ergheaf.
Jrfsnezref unf n ybat uvfgbel bs ybbxvat nsgre vgf funerubyqref. Gur pbzcnal unf qryvirerq nobir-znexrg ergheaf sbe qrpnqrf, pbzvat sebz obgu pncvgny tebjgu naq n evfvat qvivqraq.
Jrfsnezref unf nyjnlf cnvq n eryvnoyr qvivqraq, juvpu hfhnyyl pbzrf jvgu shyy senaxvat perqvgf nggnpurq. 2026 jnf gur fvkgu lrne va n ebj gung vairfgbef unir rawblrq na naahny qvivqraq cnl uvxr. Tvira guvf NFK funer’f ybat-grez sbphf naq qvirefr rneavatf onfr, V guvax vg pna or pnyyrq gur cresrpg ergverzrag fgbpx.