2 ASX retirement shares that analysts rate as buys with big upside potential

Are these the best shares to buy for a retirement portfolio?

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When you're in or nearing retirement, it may be best to start focusing on defensive options.

But which ASX retirement shares could be top picks in the current environment?

Listed below are two that analysts think could be good additions to a well-balanced retirement portfolio. Here's what you need to know about them:

Telstra Group Ltd (ASX: TLS)

The first ASX retirement share to look at is Australia's largest telco.

It ticks a lot of boxes for a retirement portfolio due to its defensive qualities, great dividend yield, and a positive growth outlook.

In respect to its dividend, Goldman Sachs is forecasting fully franked dividends per share of 18 cents in FY 2024, 20 cents in FY 2025, and 22 cents in FY 2026. Based on the current Telstra share price of $3.86, this will mean yields of 4.65%, 5.2%, and 5.7%, respectively.

The broker also sees plenty of upside for the company's shares. It has a buy rating and a $4.70 price target on them, which implies a potential upside of almost 22% for investors over the next 12 months.

Transurban Group (ASX: TCL)

Another ASX retirement share to consider buying is Transurban. It is the toll road giant behind the Linkt, Expresslane, A25 Smart Link platforms, and roads including CityLink, Cross City Tunnel, AirportlinkM7, and 95 Express Lanes.

Like Telstra, it has defensive qualities that could make it a good option for a retirement portfolio. Its roads provide invaluable time savings to commuters. And with population growth putting more cars on the roads, its portfolio of roads is arguably going to become even more important in the future. Combined with inflation-linked price increases, this bodes well for its long-term growth.

In the medium term, Citi is forecasting a "strong EBITDA growth outlook (c.12% CAGR between Fy24-FY26)." It expects this to underpin dividends per share of 63 cents in FY 2024, 65 cents in FY 2025, and 68 cents in FY 2026. This will mean yields of 5%, 5.2%, and 5.5%, respectively.

Citi has a buy rating and a $15.90 price target on its shares, which suggests a potential upside of 28% for investors.

Citigroup is an advertising partner of The Ascent, a Motley Fool company. Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Goldman Sachs Group and Transurban Group. The Motley Fool Australia has positions in and has recommended Telstra Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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