|August 3, 2015
The 6.4% Yielder Profiting From America's Consumer Spending Boom
By Nathan Slaughter
How much money did you spend yesterday?
Think about it for a minute. You might've purchased your morning coffee, lunch, that overdue oil change you'd been meaning to get and maybe even some groceries on the way home.
A recent Gallup poll found that the average American spends about $86 per day.
Now that might not seem like much without context. But if history is any guide, that spending could translate into a major comeback for one powerful industry that's been lying dormant for years.
The first thing you need to know is that the last $86 per day is a pretty remarkable figure.
The last time we saw such vigorous buying behavior was in 2008, just before the recession hit. Since then, consumers have dialed back their non-essential spending. But today, it appears they are waking from their slumber.
According to the Wall Street Journal, U.S. shoppers have been on a "buying binge" lately. And three factors, in particular, have led to this resurgence in the American consumer.
The first is the fact that gas prices have dropped significantly.
Today, gas prices are 42% cheaper on average than they were a year ago. That means Americans are on pace to spend $100 billion less at the pump in 2015.
The second factor, as I mentioned earlier, is the health of our economy. Since hitting a high of 10% in 2009, U.S. unemployment has since plummeted to just 5.4%.
Last year, American businesses added 2.95 million new jobs to their ranks. And the average hourly pay has risen 2.3% up to $24.96 per hour as well.
That means more consumers with more money in their pockets, too.
And that leads me to the last factor contributing to the reemergence of the American spending -- our portfolios are growing.
Between rebounding home prices (the largest investment for most families) and the fact that millions of workers are opening year-end brokerage and 401(K) accounts showing rising balances -- people just are beginning to feel wealthier.
And when consumers feel wealthier, they typically spend more. So the question is: where is all this new discretionary spending most likely to be put to use?
You might think the retail industry is a great place to look. But the fact is if you're looking to really bolster your income, this just isn't the place to do it.
Take a look at some of the yields you might receive by investing in a few industry leaders.
|You Won't Find Big Payouts
In The Retail Sector
|Wal-Mart Stores, Inc. (NYSE: WMT)
|Target Corp. (NYSE: TGT)
|Costco Wholesale Corp. (Nasdaq: COST)
|Dollar General Corp. (NYSE: DG)
|Big Lots, Inc. (NYSE: BIG)
|Source: Yahoo! Finance
Many of these are right on-par with the S&P average; some are much lower.
That's why I'm looking to an overlooked sector that hauls in more than $560 billion in annual sales and offers payouts up to three-times bigger than the market average -- the leisure and entertainment industry.
As it stands, Americans already spend more than $10 billion annually at movie theaters (not counting popcorn). We fork over $18 billion for cruises. We drop $25 billion at professional sporting events and $35 billion at casinos.
And over the years, I've profited from hotels, gaming resorts, even yacht makers.
But I've found one under-the-radar company today that is being propelled to new heights by the collection of powerful catalysts I mentioned earlier.
It's a real estate investment trust (REIT) that you've probably never heard of. Though I'd bet money that you've been to one of the company's massive collection of properties located across the country.
In total, its portfolio includes more than 2.5 million square feet of shopping, dining, live music venues and family-oriented activities such as bowling and ice skating.
The company also owns four water parks, 10 metro ski resorts, 11 TopGolf complexes and 135 megaplex theaters.
These are the types of businesses where American families are spending billions every year. And all this company has to do is sit back and collect rent checks from each of its 250 tenants.
But what income investors will love so much about this little-known firm is that nearly all of its income goes straight to its stockholders. That's because REIT's are required by the IRS to pay out 90% of their income to shareholders.
I call these massive payments "Apple Pie Royalties" because the types of businesses this company leases its properties out to are practically engrained into the American psyche.
Currently the firm is yielding a strong 6.4%, which it pays in monthly installments. And that figure is likely to increase, as the company's annual dividend has grown by an average of 7% every year since 2010.
Put simply, this company is one of the most lucrative money-machines I've ever seen. And it's not the only one.
There are other companies out there shelling out these types of massive payouts to investors savvy enough to find them. That's why I decided to put together my new report -- "Supercharge Your Retirement Income with Apple Pie Royalties" -- to help you identify these highly lucrative opportunities.
Whether your goal is something as simple as having enough money to pay your bills in retirement, or as ambitious as filling your golden years with the lavish trips you never took in your youth, companies like these can make it possible.
My new report will tell you everything you need to know to get started supercharging your retirement income today -- access the report here.
Chief Investment Strategist