REITs were trashed swiftly and thoroughly as soon as investors realized April rent payments were goi...
This REIT Keeps the Food COLD
06/11/2020 5:00 am EST
One longer-term trend that has been pushed forward by years by the pandemic is online grocery shopping, notes Tony Daltorio, contributing editor to Eddy Elfenbein's Growth Stock Advisor.
A recent survey found that 43 million U.S. shoppers placed 73.5 million online grocery orders in May, at an average of $90 per order — a 24% increase over April and a 450% increase since August 2019.
A conservative way to play the online grocery shopping trend is the world's biggest REIT focused on refrigerated warehouses: Americold Realty Trust (COLD).
The company's warehouses are an indispensable component of the food industry infrastructure. The company owns and operates 178 temperature-controlled warehouses, with about 1.1 billion refrigerated cubic feet of storage, in the United States, Australia, New Zealand, Canada and Argentina.
With consumers embracing online grocery shopping, demand for cold storage facilities for storing frozen goods is rising quickly. Americold has a 23% market share in the United States and a 4.2% market share worldwide.
Refrigerated warehouses account for the majority of the company's revenues (78%) and its net operating income (NOI; 94%). Americold serves 2,500 customers, including a who's who of the food industry.
Americold has a 2.33% yield. With its business doing well, I expect its current quarterly dividend (21 cents a share) to steadily rise a penny or two per year. The stock is a holding in the model portfolio of our specialty advisory service, Growth Stock Confidential.
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