The best thing about investing in the stockmarket is the ability to earn more than 100% on an investment, but at the same time set a floor on your losses if necessary. In addition finding growing companies with a predisposition for returning excess funds to shareholders can prove to be very rewarding.
If you're approaching retirement, security and dividends are two characteristics which are most important. Here are four stable blue-chip stocks which, I believe, would suit long-term investors in retirement and reward you with growing earnings and dividends.
1. Australia and New Zealand Banking Group (ASX: ANZ) doesn't come cheap. Investors' desire for high dividend yields has put upwards pressure on its share price. However if you're determined to invest in at least one big bank, I believe it should be this one. With overseas earnings growing quickly and a 5.1% fully franked dividend yield, there's a lot to like about ANZ.
2. Telstra Corporation Ltd (ASX: TLS) also pays a spectacular dividend – forecast at 5.5% fully franked. Like ANZ it dominates the local market with reputable operating margins and a large customer base, providing the perfect platform from which it can leverage its overseas expansion.
3. Washington H. Soul Pattinson & Co. Ltd (ASX: SOL) ("WHSP") is a diversified holding company with a portfolio of well known Australian businesses. It is forecast to pay a 3.2% fully franked dividend in the next 12 months.
4. Transurban Group (ASX: TCL) is probably my favourite "lifetime" stock inside the S&P/ASX 200 (ASX: TCL) (INDEX: ^AXJO). I haven't bought in yet because I'm waiting for it to get cheaper. However, I'm waiting for a setback in price that may never eventuate. Despite trading on a whopping 66 times FY13 earnings, the toll road operator is forecast to pay a 4.3% dividend with partial franking.
A BETTER ASX dividend idea
Of the four companies, currently I consider Telstra and WHSP to be the best value for long-term investors but for the right price I'd prefer to hold Transurban Group and ANZ. However there's a chance that I will never see a price I'll be happy to pay.
