If you are a retired investor, then having a reliable income stream is probably one of your top priorities.
Fortunately, this can be quite easily achieved by investing in a diversified portfolio of dividend shares.
Diversification is important as this will help to smooth out any bumps along the way and, at the same time, reduce the risk of a permanent loss of capital.
So with that in mind, here are three shares that could help to create an ideal portfolio for the retired investor:
Sonic Healthcare Limited (ASX: SHL)
Sonic Healthcare is a world-leading pathology and diagnostic imaging company. It has a massive global footprint which continues to expand through bolt-on acquisitions. The company has not cut its dividend over the last couple of decades and I am confident this trend will continue as its earnings will be underpinned by the ever-increasing demand for healthcare services. The shares are a little on the expensive side right now, although investors are still being offered a partially franked dividend yield of 3.5%.
Transurban Group (ASX: TCL)
Transurban is the ideal dividend share as the company operates monopolistic assets that generate very strong and reliable levels of cashflow. Unfortunately, the shares don't come cheap as the market has bid up the shares as a result of the low interest rate environment. The shares are still currently yielding around 4.3%, however I think investors should remain patient and wait for a yield of at least 5.0% before going all-in.
Washington H. Soul Pattinson and Co. Ltd (ASX: SOL)
Soul Patts is the perfect example of how to create wealth through long term investing. The investment company has delivered a compound annual return of 16.8% over the last 40 years by buying and holding high-quality businesses over long periods of time. Importantly, Soul Patts recognises the importance of generating a growing income stream for shareholders and has achieved this objective with an unbroken record of dividend increases over the last two decades. The shares currently offer a fully franked dividend yield of 2.8%.
