3 ASX shares for a stress-free life

Want a stress-free life? I think these ASX shares could be a good pick to deliver returns that aren't too volatile with good cashflow.

| More on:

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

There's a lot of things to be stressed about right now with COVID-19 and related impacts. Some ASX shares could help give you less stress than the typical ASX stock.

Of course, share prices do move. There are buyers and sellers of all shares on the ASX. Different people will have different views on what they're willing to transact shares for.

Some businesses offer quite predictable annual cashflow, so there may be a more consistent market valuation for a reliable earner compared to an inconsistent business or one with an unknown future like Fortescue Metals Group Ltd (ASX: FMG) or Afterpay Ltd (ASX: APT).

Here are three ASX shares that could help with a stress-free life:

man sitting in hammock on beach representing asx shares to buy for retirement

Image source: Getty Images

APA Group (ASX: APA)

What's APA Group? It 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 and delivers half the nation's natural gas usage.

Delivering a lot of the country's gas is an important job that's done by this ASX share and leads to reliable cashflow. In FY20, which included COVID-19, APA saw revenue rise 4.8% to $2.13 billion and net profit increased 10.1% to $317.1 million. Operating cash flow rose 8.3% to $1.1 billion.

The FY20 distribution rose by 6.4% to 50 cents per unit. It has actually increased its distribution for the past decade and a half.

In FY21 the ASX share is expecting profit to be largely the same, but the APA share price has fallen a little since mid-August – making it a better value buy.

At the current APA Group share price it offers a distribution yield of 4.6%.

Rural Funds Group (ASX: RFF)

Rural Funds is an agricultural real estate investment trust (REIT) which owns a variety of farmland including cattle, almonds, macadamias, vineyards and cropping (cotton and sugar).

Property landlords are attractive because they (usually) generate regular rental income and rental profit. We all need to eat food. I think Rural Funds is an attractive, defensive idea.

The ASX share receives good rent from high-quality tenants like Select Harvests Limited (ASX: SHV), Treasury Wine Estates Ltd (ASX: TWE), Olam, JBS and Australian Agricultural Company Ltd (ASX: AAC).

Not only does it have reliable existing earnings, but it's steadily growing thanks to contracted rental increases. Rental increases are either a fixed 2.5% per annum, or it's linked to CPI inflation. Some contracts have market reviews.

Each year the farmland REIT aims to increase its distribution by 4% per annum. The ASX share is currently investing in improving some of its farms to generate more rental income.

At the current Rural Funds share price it has a FY21 distribution yield of 4.7%.

Washington H. Soul Pattinson and Co. Ltd (ASX: SOL)

I think Soul Patts could be one of the most stress-free ASX shares around. It has actually been listed on the ASX since 1903 – it has already survived through the Spanish Flu, two world wars and various recessions.

The investment conglomerate looks to invest in defensive assets that can provide reliable earnings even in a recession. That's why its (somewhat) recent expansion into swimming schools was (and is) a good move to protect against most recessions – people hopefully still want their children to learn how to swim even if the economy is uncertain. Only a global pandemic was capable of stopping those swimming earnings.

Soul Patts owns plenty of other reliable businesses like TPG Telecom Ltd (ASX: TPG), Brickworks Limited (ASX: BKW), Milton Corporation Limited (ASX: MLT), Bki Investment Co Ltd (ASX: BKI) and Clover Corporation Limited (ASX: CLV).

The ASX share has been a very reliable dividend payer. It has increased its dividend every year since 2000. No other ASX share has a current dividend record as good as that.

At the current Soul Patts share price it has a grossed-up dividend yield of 3.45%.

Foolish takeaway

Each of these ASX shares are defensive, offer reliable cashflow and pay growing dividends to shareholders. Soul Patts shares have risen over September, though I still prefer it because of the diversification and longevity. Both Rural Funds and APA aren't cheap, but they could be stress-free ideas too with their good cashflow.

Tristan Harrison owns shares of RURALFUNDS STAPLED and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of Clover Limited. The Motley Fool Australia owns shares of and has recommended Brickworks, RURALFUNDS STAPLED, Treasury Wine Estates Limited, and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia owns shares of AFTERPAY T FPO and APA Group. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Defensive Shares

A businessman waers armour and holds a shield and sword.
Defensive Shares

Why you need defensive ASX shares in your portfolio right now: WAM

2023 could be the year when the quality of businesses shines through.

Read more »

A male investor sits at his desk looking at his laptop screen holding his hand to his chin pondering whether to buy Macquarie shares
Defensive Shares

For $200 in weekly passive income, buy 10,300 shares of this ASX 200 stock

This ASX blue chip could unlock enormous passive income for investors.

Read more »

Woman relaxing and using her Apple device
Financial Shares

For $1,000 in monthly passive income, buy 1,770 shares of this ASX 200 stock

This ASX blue chip could unlock enormous passive income for investors.

Read more »

a man sits at a bar with a half full glass of beer and looks sadly into his mobile phone while propping his head on his hand with his elbow resting on the bar.
Broker Notes

Credit and drinks: Experts name 2 ASX shares to buy for a 2023 economic slowdown

Interest rate rises have now stepped up nine months in a row. The economy will suffer for a while.

Read more »

A young investor working on his ASX shares portfolio on his laptop
Defensive Shares

Here's why I'd buy this ASX 200 share with conviction if there's a recession

This ASX share could be stronger in a recession.

Read more »

Three boys dressed as knights wield swords as they defend their castle wall.
Defensive Shares

3 ASX shares to buy for a possible recession next year

Here are three names that could provide protection in a downturn.

Read more »

A woman wearing dark clothing and sporting a few tattoos and piercings holds a phone and a takeaway coffee cup as she strolls under the Sydney Harbour Bridge which looms in the background.
Defensive Shares

Buy now: Experts name 2 ASX 200 companies essential to Aussie life

When the economy is slowing down, you need to look for businesses that consumers just can't live without.

Read more »

A boy stands firm on a rocky cliff holding a rocket in each hand and looking up toward the sky, anticipating flying into space.
Opinions

Worried about a stock market crash? I'd buy these 5 rock-solid ASX shares to ride it out

Coast through a cold market with these hardened companies.

Read more »