I think that defensive infrastructure APA Group (ASX: APA) is a retiree's dream in the current economic conditions at this share price.
The coronavirus has really sent the Australian economy upside down. Unemployment is expected to get to 10% (or more) despite the jobkeeper package. Various industries have seen an almost complete shutdown, like travel and physical retail stores.
I think the APA share price is a great defensive option:
About APA
APA Group owns a vast network of 15,000km of natural gas pipelines around Australia with a presence in every mainland state and the Northern Territory. It also owns or has interests in gas storage facilities, gas-fired power stations and renewable energy generation (wind and solar farms). APA owns, or manages and operates, a portfolio of assets worth more than $21 billion and delivers half the nation's natural gas usage.
Why is the APA share price a good defensive option?
One of the main things that retirees should look for is defensive cashflow to fund reliable dividends/distributions. This definitely describes APA.
Its distribution is funded by the annual cashflow. The distribution and cashflow have been growing at a steady pace for over a decade.
There continues to be solid demand for gas across the country. People will continue to need gas for their cooking and heating needs.
With Ramsay Health Care Limited's (ASX: RHC) dividend record recently coming to an end, there are very few shares with a good long-term income record like APA.
Just look at how the APA share price has performed during the coronavirus pandemic. Whilst it initially did dip, it's now trading at a similar level to what it was before the market crashed.
Foolish takeaway
At the current APA share price, it offers a FY20 distribution yield of 4.5%. With interest rates so low, I think APA is a very attractive option for conservative income. It continues to invest for future growth in new projects which should help grow the earnings and the distribution higher.
