Best of the Week
Most Popular
1. Stock Markets and the History Chart of the End of the World (With Presidential Cycles) - 28th Aug 20
2.Google, Apple, Amazon, Facebook... AI Tech Stocks Buying Levels and Valuations Q3 2020 - 31st Aug 20
3.The Inflation Mega-trend is Going Hyper! - 11th Sep 20
4.Is this the End of Capitalism? - 13th Sep 20
5.What's Driving Gold, Silver and What's Next? - 3rd Sep 20
6.QE4EVER! - 9th Sep 20
7.Gold Price Trend Forecast Analysis - Part1 - 7th Sep 20
8.The Fed May “Cause” The Next Stock Market Crash - 3rd Sep 20
9.Bitcoin Price Crash - You Will be Suprised What Happens Next - 7th Sep 20
10.NVIDIA Stock Price Soars on RTX 3000 Cornering the GPU Market for next 2 years! - 3rd Sep 20
Last 7 days
Intel Empire Fights Back with Rocket and Alder Lake! - 24th Jan 21
4 Reasons for Coronavirus 2021 Hope - 24th Jan 21
Apple M1 Chip Another Nail in Intel's Coffin - Top AI Tech Stocks 2021 - 24th Jan 21
Stock Market: Why You Should Prepare for a Jump in Volatility - 24th Jan 21
What’s next for Bitcoin Price – $56k or $16k? - 24th Jan 21
How Does Credit Repair Work? - 24th Jan 21
Silver Price 2021 Roadmap - 22nd Jan 21
Why Biden Wants to Win the Fight for $15 Federal Minimum Wage - 22nd Jan 21
Here’s Why Gold Recently Moved Up - 22nd Jan 21
US Dollar Decline creates New Sector Opportunities to Trade - 22nd Jan 21
Sandisk Extreme Micro SDXC Memory Card Read Write Speed Test Actual vs Sales Pitch - 22nd Jan 21
NHS Recommends Oximeter Oxygen Sensor Monitors for Everyone 10 Months Late! - 22nd Jan 21
DoorDash Has All the Makings of the “Next Amazon” - 22nd Jan 21
How to Survive a Silver-Gold Sucker Punch - 22nd Jan 21
2021: The Year of the Gripping Hand - 22nd Jan 21
Technology Minerals appoints ex-BP Petrochemicals CEO as Advisor - 22nd Jan 21
Gold Price Drops Amid Stimulus and Poor Data - 21st Jan 21
Protecting the Vulnerable 2021 - 21st Jan 21
How To Play The Next Stage Of The Marijuana Boom - 21st Jan 21
UK Schools Lockdown 2021 Covid Education Crisis - Home Learning Routine - 21st Jan 21
General Artificial Intelligence Was BORN in 2020! GPT-3, Deep Mind - 20th Jan 21
Bitcoin Price Crash: FCA Warning Was a Slap in the Face. But Not the Cause - 20th Jan 21
US Coronavirus Pandemic 2021 - We’re Going to Need More Than a Vaccine - 20th Jan 21
The Biggest Biotech Story Of 2021? - 20th Jan 21
Biden Bailout, Democrat Takeover to Drive Americans into Gold - 20th Jan 21
Pandemic 2020 Is Gone! Will 2021 Be Better for Gold? - 20th Jan 21
Trump and Coronavirus Pandemic Final US Catastrophe 2021 - 19th Jan 21
How To Find Market Momentum Trades for Explosive Gains - 19th Jan 21
Cryptos: 5 Simple Strategies to Catch the Next Opportunity - 19th Jan 21
Who Will NEXT Be Removed from the Internet? - 19th Jan 21
This Small Company Could Revolutionize The Trillion-Dollar Drug Sector - 19th Jan 21
Gold/SPX Ratio and the Gold Stock Case - 18th Jan 21
More Stock Market Speculative Signs, Energy Rebound, Commodities Breakout - 18th Jan 21
Higher Yields Hit Gold Price, But for How Long? - 18th Jan 21
Some Basic Facts About Forex Trading - 18th Jan 21
Custom Build PC 2021 - Ryzen 5950x, RTX 3080, 64gb DDR4 Specs - Scan Computers 3SX Order Day 11 - 17th Jan 21
UK Car MOT Covid-19 Lockdown Extension 2021 - 17th Jan 21
Why Nvidia Is My “Slam Dunk” Stock Investment for the Decade - 16th Jan 21
Three Financial Markets Price Drivers in a Globalized World - 16th Jan 21
Sheffield Turns Coronavirus Tide, Covid-19 Infections Half Rest of England, implies Fast Pandemic Recovery - 16th Jan 21
Covid and Democrat Blue Wave Beats Gold - 15th Jan 21
On Regime Change, Reputations, the Markets, and Gold and Silver - 15th Jan 21
US Coronavirus Pandemic Final Catastrophe 2021 - 15th Jan 21
The World’s Next Great Onshore Oil Discovery Could Be Here - 15th Jan 21
UK Coronavirus Final Pandemic Catastrophe 2021 - 14th Jan 21
Here's Why Blind Contrarianism Investing Failed in 2020 - 14th Jan 21
US Yield Curve Relentlessly Steepens, Whilst Gold Price Builds a Handle - 14th Jan 21
NEW UK MOT Extensions or has my Car Plate Been Cloned? - 14th Jan 21
How to Save Money While Decorating Your First House - 14th Jan 21
Car Number Plate Cloned Detective Work - PY16 JXV - 14th Jan 21
Big Oil Missed This, Now It Could Be Worth Billions - 14th Jan 21
Are you a Forex trader who needs a bank account? We have the solution! - 14th Jan 21
Finetero Review – Accurate and Efficient Stock Trading Services? - 14th Jan 21

Market Oracle FREE Newsletter

FIRST ACCESS to Nadeem Walayat’s Analysis and Trend Forecasts

Retail Sector Isn’t Dead, and These 6% Dividend Paying Stocks Prove It

Companies / Retail Sector Dec 14, 2019 - 12:45 PM GMT

By: Robert_Ross

Companies

I’m sure you’re familiar with the “retail apocalypse.” Brick-and-mortar retailers are dying off as people buy more stuff online, or so the story goes.

This trend has taken out household names like Circuit City, Blockbuster Video, and Payless ShoeSource. Even luxury retailer Barneys filed for bankruptcy this year.

All told, about 9,000 brick-and-mortar stores closed in 2019. Meanwhile, e-commerce sales are growing around 5% per year. But there’s more to this story...

Despite the headline-grabbing bankruptcies, about 90% of US retail sales still happen in person.



In fact, brick-and-mortar retail sales have grown 2.4% per year since 2009. And they’re poised to keep growing around 2% annually through 2024.



Now, two percent represents steady growth. But select corners of brick-and-mortar retail are absolutely thriving…

We Still Buy Furniture the Old-Fashioned Way

Scroll through a list of retail stores that have closed over the last decade, and you’ll notice one segment that’s largely missing: furniture.

The way we buy couches and cabinets hasn’t changed much. Nearly 85% of Americans still buy their furniture at brick-and-mortar stores.



This isn’t changing anytime soon. In-store furniture sales are expected to grow 5% per year through 2024.

The stability of this retail niche shows up in stock prices.

For example, home furnishing giant Williams-Sonoma, Inc. (WSM), has soared 38% this year, squashing the S&P 500.



Williams-Sonoma owns the popular Pottery Barn and West Elm brands. The company makes it easy for customers to shop both in-store and online. This has helped it thrive in the new retail landscape.

Williams-Sonoma also boasts a solid 2.9% dividend yield.

Nike’s Enjoyed a Solid Year

Many apparel companies are taking a similar hybrid approach.

Take Nike, Inc. (NKE), for instance. The athletic apparel giant has over 1,100 retail stores and a convenient online platform. Plus, the overwhelming majority of sporting goods companies sell Nike products in their brick-and-mortar stores.

This is part of the reason Nike’s stock has beaten the S&P 500 over the last year:



Nike also has a safe 1.1% dividend yield.

The Best Way to Invest in Retail

Buying shares of high-performing retailers like Williams-Sonoma and Nike would give you a piece of the action. But there’s an even better way for income investors to profit from the stable US retail market: retail real estate investment trusts (REITs).

They’re special business entities that own different kinds of properties—trailer parks, hospitals, factories, commercial real estate, and everything in between.

Retail REITs own the buildings where traditional retailers operate. This gives them exposure to a range of different stores, which diversifies your investment.

All REITs are required to pay out 90% of their income as dividends. So retail REITs often pay huge dividends—sometimes 3 or 4 times higher than their tenants.

Retail REIT dividends even outshine other types of REITs:



A lot of high dividends aren’t that safe. That’s why I developed a proprietary system called the Dividend Sustainability Index (DSI) to measure dividend safety. In a nutshell, the DSI looks at three key metrics: payout ratio, debt-to-equity ratio, and free cash flow.

These three retail REITs passed the DSI with flying colors.

Three Retail REITs with Big, Safe Dividends

Simon Property Group (SPG) sits at the top of my list.

When you look at Simon’s financials, there’s no sign of a retail apocalypse. Since 2009, the company’s operating income (the equivalent of profits for REITs) has grown an average of 9% annually.

At the same time, Simon has increased its dividend 14% per year over the last decade. Its dividend yield is now 5.7%. So it’s a great addition to any income investor’s portfolio.

Next up is grocery REIT Weingarten Realty Investors (WRI). The company leases stores to major grocers like Whole Foods, Publix, and BevMo!

Online grocery sales are expected to make up 5% of grocery sales by 2024. But people will keep buying most of their groceries in-store for the foreseeable future.

Overall, grocery sales are expected to grow 3.1% per year through 2023. This bodes well for Weingarten. Plus, the company sports a juicy 5.1% dividend yield.

Our final retail REIT is SITE Centers Corp. (SITC). The company owns and operates 33 shopping centers throughout the US.

SITC pays a reliable 5.7% dividend yield. It also has a low payout ratio of 48% and a very healthy debt-to-equity ratio of 47%. So it should continue to meet its sizable dividend payments for the foreseeable future.

All three of these REITs should continue to profit from the stable US retail market. And their robust dividends make them attractive to income investors like us.

The Sin Stock Anomaly: Collect Big, Safe Profits with These 3 Hated Stocks

My brand-new special report tells you everything about profiting from “sin stocks” (gambling, tobacco, and alcohol). These stocks are much safer and do twice as well as other stocks simply because most investors try to avoid them. Claim your free copy.

By Robert Ross

© 2019 Copyright Robert Ross. - All Rights Reserved Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules