5 Stocks for your Retirement Income Plan - CGF, TCL, LIC, CL1, TLS

  • Jan 31, 2020 AEDT
  • Team Kalkine
5 Stocks for your Retirement Income Plan - CGF, TCL, LIC, CL1, TLS

If the investor wants income for retirement, he/she can go for various sources like super and the Age Pension. The stocks chosen for this purpose, should be such that it must have strong management, are able to give money for longer time may be in the form of dividends, must have potential to grow & sustain for longer period of time, ensure the investor’s capital will grow in value to keep pace with inflation and the income needs etc. The investors should diversify their portfolio in quality stocks that prove to be better than alternative ‘high’ interest savings account or term deposit.

Let’s have a look on the stocks - CGF, TCL, LIC, CL1, TLS that can be considered for retirement.

Challenger Ltd (ASX:CGF)

Maintain Strong Capital Position:

Challenger Ltd (ASX:CGF) formerly known as Challenger Financial Services Group Limited, provides financial services as it offers annuities and guaranteed income payments to the thousands of retirees in Australia. The company invests the money of investors in shares, government and corporate bonds, convertible notes, debt instruments, property investments, infrastructure investments and other assets, but it does not cross the restrictions given in the Life Insurance Act.

CGF’s capital position is strong, as it had $1.4 billion of excess regulatory capital at the end of June 2019, which reflects 53% higher than APRA’s minimum requirement. For the first quarter 2020, the company’s total assets under management (AUM) grew 3% ($3 billion) to $84 billion, on the back of strong net flows and positive investment markets.

For fiscal 2020, the company anticipates the full year dividend to be 35.5 cents per share. The company intends to move above the target payout ratio range expected to be of 45% to 50% of normalised net profit after tax due strong business and capital position. Also, 2020 normalised net profit before tax is projected to be between $500 million - $550 million.

On 31 January 2020, CGF stock was trading at $8.905, rising up by 1.424 percent (at AEDT 2:04 PM). Also, CGF stock has risen 12.28% in three months as on January 30th, 2020, has an annual dividend yield of 4.04% and is trading at a P/E of 17.250x.

Transurban Group (ASX:TCL)

Termination of D&C Subcontract:

Transurban Group (ASX:TCL) is a leading company in the world that manages toll road and is also in the management & development of urban toll road networks in Australia and North America (Greater Washington and Montreal).

On 29 January 2020, TCL notified the market that WGT Co Pty Ltd received a document from the CPBJH Joint Venture on West Gate Tunnel Project that was related to the termination of the D&C Subcontract due to a Force Majeure Termination Event. The D&C Subcontract will be terminated due to the presence, classification and disposal of per and polyfluorinated alkyl substances (PFAS) in the project site though CPBJH Joint Venture does not consider it to be valid which means that the contract is still valid. Further, CPBJH Joint Venture still wants to work on the project site.

On 31 January 2020, TCL stock was trading at $15.665, slipping up by 0.603 percent (at AEDT 2:12 PM). Also, TCL stock has risen 7.28% in three months as on January 30th, 2020, has an annual dividend yield of 3.87% and is trading at a P/E of 238.790x.

Lifestyle Communities Limited (ASX:LIC)

Purchases a new site on the Bellarine Peninsula:

Lifestyle Communities Limited (ASX:LIC) is a company that provides the people in their fifties and above with the resort style housing and manages & develops residential accommodation for them.

As announced in November, last year, LIC had signed the contract of sale for acquiring the site in St Leonards, situated on Victoria’s Bellarine Peninsula. The settlement of this contract is anticipated to happen at the end of 2020 and the company expects to start construction on this site after this. After this acquisition, the company’s portfolio has grown by about 170 home sites to reach 3,730, in which the sites in planning, development or under management are also incorporated.

Moreover, the company has already started construction at Lifestyle Kaduna Park & at Lifestyle Wollert and their first settlements are anticipated in Q4 of FY20 and Q1 of FY21 respectively.

19 Communities in planning, development or under management (source: Company’s Report)

On 31 January 2020, LIC stock was trading at $9.135, moving up by 0.164 percent (at AEDT 2:18 PM). Also, TCL stock has risen 13.15% in three months as on January 30th, 2020, has an annual dividend yield of 0.6% and is trading at a P/E of 17.310x.

Class Ltd (ASX:CL1)

Strong Account Growth:

Class Ltd (ASX:CL1) develops and provides platform to use it in cloud-based software solutions for accounting, administration, and reporting of investment portfolios by financial advisors, accountants & administrators.

The company in the December quarter has reported 2600 increase in the total accounts, 1805 accounts increase in the Class Super with net of about 400 AMP suspensions, 670 accounts increase in Class Portfolio and about 120 accounts increase Class Trust.

On 31 January 2020, CL1 stock was trading at $2.045, moving down by 0.244 percent (at AEDT 2:27 PM). Also, CL1 stock has risen 4.59% in three months as on January 30th, 2020, has an annual dividend yield of 2.44% and is trading at a P/E of 26.760x.

Telstra Corporation Ltd (ASX:TLS)

Outlook for FY 20:

Telstra Corporation Ltd (ASX:TLS) is a leading Australian company operating in telecommunications that makes and operates the telecommunications networks and offers services like markets voice, mobile, internet access, pay television etc.

For fiscal 2020, the company anticipates underlying EBITDA to be $500 million, with the rise in Underlying EBITDA without nbn headwind and product trajectory, especially mobile, are projected to enhance in the second half of the year 2020 compared to the previous corresponding period.

Further, in FY 2020, the company expects to reduce the costs by $630 million. The company is on track to expand its 5G footprints in fiscal 2020 on the back of ongoing expansions of capital city and 5G coverage of 15 additional cities.

On 31 January 2020, TLS stock was trading at $3.855, moving down by 0.13 percent (at AEDT 2:38 PM). Also, TLS stock has risen 10.60% in three months as on January 30th, 2020, has an annual dividend yield of 2.59% and is trading at a P/E of 21.330x.


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