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For those thinking the current environment in the bond market will change, think again.
The latest data on inflation may have affirmed the Federal Reserve's neutral stance on rates, but it did nothing to move the bond market.
What should have been a spike in long-term interest rates was another dud.
In fact, after the release of the data, rates actually declined.
Either the market is broken, or there is a massive systemic change in global economic productivity.
It doesn't matter which. The fact is historically low interest rates are here to stay.
That's bad news for investors searching for yield and hoping rates will eventually return to "normal."
The U.S. Federal Reserve seems to have given up on the idea of interest rate normalization. What we have today should now be considered the "new normal."
And it's best to deal with it accordingly.
And so the search for yield continues. Unfortunately, the number of high-yielding opportunities is diminishing as more and more investors chase down opportunities in things like REITs.
So we have to change how we go about our search.
Instead of simply looking at REITs with already high yields, I'm now looking for REITs with yields that are poised to climb significantly going forward.
The yield may be unassuming today, but watch out - because a much higher yield is around the corner.
And when that higher yield comes, so too will the flood of investors looking for income in a perpetually low-interest-rate environment.
Jackpot!
Are there any REITs with dividends that are going up substantially? Traditionally, REITs are not known as growth opportunities.
The best REITs tend to be the ones with stable cash flows. But this is a new normal where growing dividends become more and more important.
What we need is a REIT in a rapidly growing industry.
And that's exactly what I've found for you today...
This REIT Is About to See Its Dividend Grow Substantially
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One sector that's booming today is food delivery.
There are multiple offerings in the space looking to exploit the desire of the consumer for speed and convenience.
None other than Amazon.com Inc. (NASDAQ: AMZN) is getting in on the act with its purchase of Whole Foods Market.
Making food delivery work requires a network of warehouses specially designed for cold storage.
The leader in owning temperature-controlled real estate is Americold Realty Trust (NYSE: COLD).
Based in Atlanta, COLD has nearly 200 facilities with a billion cubic square feet of refrigerated-storage in locations across the globe, including the United States.
To the extent the online food delivery industry is growing, the number of refrigerated facilities will expand tremendously.
Currently, Americold is paying a dividend of 2.3%. But that number is likely to double or more going forward.
Analysts expect Americold to make $0.44 per share in 2019. Next year, that number nearly doubles to $0.76 per share.
That sort of performance is usually reserved for growth companies, not dividend-paying REITs.
And those numbers are likely to continue growing as Amazon moves to dominate the online grocery business.
By way of comparison to see what is coming down the road for Americold, take a look at revenue generated by other industrial REITs.
It's in the tens of billions of dollars.
Fiscal year 2019 revenue for Americold is estimated to be $1.5 billion, leaving plenty of growth on the table.
Sure, the food category is not the same as the overall warehouse needs of the entire retail sector, but it's close.
Food is far more important to the economy than other consumer goods. The fact that much of it is perishable bodes well for Americold.
At some point in the very near future, Americold will be a dividend stock paying more than 5% per annum.
When earnings grow as they are expected to grow next year, those profits are required to be distributed to shareholders.
That's the beauty of owning a REIT.
And when that dividend goes up at Americold, so too will the stock price as yield vultures pile in.
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