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2 ASX shares to buy for rock solid retirement income

Tristan Harrison
income statement

Retirees should be looking for ASX shares that can offer rock solid retirement income.

You don’t want to spend your whole life building up a nest egg to see it disappear because of poor investment choices.

It’s unavoidable that share prices will go up and down, hopefully up over the long-term. But you can definitely pick shares that provides rock solid income even if the capital value part of your investment is a bit variable.

Here are two ASX shares to buy for rock solid retirement income:

Brickworks Limited (ASX: BKW) 

Brickworks could claim to be one of the most reliable dividend shares on the ASX. It has maintained or grown its dividend every year since 1976.

The company has several divisions which provide solid, reliable returns. Brickworks has investment and property divisions that together essentially back up the entire Brickworks market capitalisations whilst also providing funding for the Brickworks dividend.

Brickworks has a market-leading position in brickmaking in Australia and it also has one of the top positions in several other building product categories. Australia’s cities continue to grow and regenerate, so Brickworks has a good earnings profile here.

The company also recently expanded into the US brickmaking market with acquisitions, it’s already a market-leader in the north east of the US.

It currently has a grossed-up dividend yield of 4.1%.  

Viva Energy Reit Ltd (ASX: VVR) 

This is a real estate investment trust (REIT) which owns a large portfolio of service stations across Australia which are mostly operated by Viva Energy Group Ltd (ASX: VEA) – this is the company that sells the fuel at Coles Express service stations.

It currently owns over 450 service stations across in Australia, mainly in metropolitan areas. There is a fixed 3% rental escalation with 95% of its properties and it has a WALE of around 12 years, which means it has attractive rental growth locked in for over a decade.

The REIT continues to make acquisitions which can further boost the income potential. Rental contracts mean the distributions are mostly locked in.

It currently has a trailing distribution yield of 5.2%.

Foolish takeaway

Out of these two shares I think Brickworks could be the better pick. Its earnings has better growth potential and its assets are better diversified than the REIT.

The post 2 ASX shares to buy for rock solid retirement income appeared first on 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 has recommended Brickworks. 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.

The Motley Fool's purpose is to help the world invest, better. Click here now for your free subscription to Take Stock, The Motley Fool's free investing newsletter. Packed with stock ideas and investing advice, it is essential reading for anyone looking to build and grow their wealth in the years ahead. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson. 2020