5G wireless service is coming and it will change the world. The new fifth generation of wireless networking is just starting to roll out. 5G will soon start replacing 4G, which has been the standard for wireless data transmission for the last half-decade. If you remember how great it was to go from 3G to 4G, 5G is going to be 50 times better. As in 50 times faster than the current 4G average.

More importantly, several new, likely life-changing technologies need the higher data speeds of 5G to function properly. At the top of the list is self-driving cars, or even human driven cars with automatic driving features. To avoid running over cats, children, the center median and other traffic on the road these vehicles will need to gather and process huge amounts of data.

5G will eventually lead to smart buildings and homes – the so-called Internet of Things or IoT. (If you’re interested in IoT be sure to check out new research from my colleague Tony Daltorio.) Life will catch up with science fiction. It is likely that it may be possible to use your new 5G smartphone or a dedicated 5G hotspot device as your all-the-time connection to the Internet.

Before we and our cars can enjoy the benefits of 5G, the infrastructure to support the tremendously higher speeds and much larger amounts of transmitted data must be built out. The current 4G network does not have sufficient capacity to handle the coming increase in data flow.

Much of the wireless and Internet infrastructure is owned by companies that specialize in providing specific parts of the infrastructure. These specialties include data centers, cell towers, and fiber communications networks. Here are three stocks that will see huge benefits from the shift to the next gen 5G wireless system.

Digital Realty Trust, Inc. (NYSE: DLR) is a data center services provider that is organized as a REIT. The company develops and operates data centers. Digital Realty owns almost datacenters located around the globe. In addition to storage solutions, the company provides interconnectivity solutions between datacenters and the Internet.

The coming 5G speeds means an exponential increase in data that will need to be shared and stored. That’s the business of Digital Realty. Since it’s a REIT, DLR can be counted on as a steady dividend paying stock.

As a player in the high-growth data storage space, this is an income stock that will provide attractive dividend growth.

The company has increased the dividend for 13 straight years, with an average double-digit compound growth rate. Investors can expect the low teens dividend growth to continue, or even accelerate in the 5G era.

The shares currently yield 3.5%.

5G connectivity will require more cell towers, spaced closer together.  American Tower Corp. (NYSE: AMT) is the largest independent owner of cell towers.

5G will require a shift to small cell and micro-sites to provide uninterrupted, high-speed coverage. AMT owns 40,000 towers that will be retrofitted to provide 5G service. The company has also formed business alliances to install micro-sites in light poles and information kiosks.

AMT is also organized as a REIT. The company has a very high path of dividend growth, increasing the payout by 24% per year compounded for the last five years. Investors can expect AMT to remain at the heart of the 5G roll-out and be able to continue the rapid dividend growth. The shares currently yield 3.3%.

AMT is also organized as a REIT. The company has a very high path of dividend growth, increasing the payout by 24% per year compounded for the last five years.

Investors can expect AMT to remain at the heart of the 5G roll-out and be able to continue the rapid dividend growth.

The shares currently yield 3.3%.

Uniti Group (Nasdaq: UNIT) is a telecommunications REIT focused on fiber optic assets. In recent years the company has focused on acquiring backhaul fiber assets. These are fiber connections between cell towers and the wired Internet.

Uniti Group has been acquiring fiber networks that connect cell towers to the wired data network. These networks can be leased up to handle higher 5G data speeds without the need to build out additional network infrastructure. This mostly unknown and underground part of the overall data network will be a big winner for Uniti as 5G rolls out.

Currently UNIT is under a legal cloud due to a lawsuit against its largest customer, Windstream Holdings (Nasdaq: WIN). The trial has been completed and the companies are waiting on the judge’s ruling. Until that ruling comes out, the prospects and dividend safety of UNIT are unclear.

Thus, the current 12% yield.

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Today I’m going to show you why this market isn’t as spooked as you might think. Then I’m going to reveal the 1 sector (and 1 fund boasting an incredible 8.7% dividend yield) that’s a screaming bargain now.

Let’s start with the state of play as I write this.

Here’s a question: of the 11 sectors that make up the S&P 500, how many do you think are negative for 2018?

If you said more than 5, the pessimism of the financial press has tainted your worldview. Take a look at this table:

5 in the Red, 5 in the Green

A close look at the 11 sectors of the S&P 500 is crucial, because we quickly see that 5 sectors are green, 5 are down and 1 is flat for 2018. While the red sectors are down big (financials energy, and materials have all dropped more than 10%), solid returns in tech, healthcare and utilities tell us most regular investors haven’t hit the panic button.

Let me explain.

Remember that there are “risk-on” and “risk-off” sectors. If investors are really worried about a big downturn, they go head-first into the “safe” and usually countercyclical consumer-staples sector—but the Consumer Staples SPDR ETF (XLP) is down 3.8% on the year, and the cyclical Consumer Discretionary SPDR ETF (XLY) is up 4.8%.

There’s a simple reason for that: everyday Americans are buying more because they’re earning more and getting jobs more easily. Therefore, it makes no sense in such an environment to run away from so-called risky assets, because those assets are the ones bagging higher revenues and earnings.

Likewise, tech and healthcare are typically high-risk sectors, with higher P/E ratios, that get sold off when a major market downturn is supposedly around the corner. But the Health Care SPDR ETF (XLV) is up nearly 10%, and tech’s 2.4% gain is after the heavy selloff of Apple (AAPL), on trade-war fears.

The lesson is obvious: while some sectors are suffering a short-term downturn, others are fine, thanks to economic growth of 3% and earnings growth of more than 20%. But the big financial media’s cavalier attitude toward the details has resulted in a lot of news about a market panic that simply isn’t there.

What About the Losers?

Before we get to one of my favorite sectors for 2019 (and that 8.7% yielder I mentioned earlier), let me quickly touch on a couple particularly beaten-down corners of the market. No, we’re not going to bottom-fish here—but these sectors’ misery has a key role to play in the nice price pop (and income) our pick is poised to hand us in the months ahead.

The first is materials, which saw earnings growth fall sharply, to 10%, in the third quarter, largely due to sluggish commodity prices across the sector, which lowers their pricing power because materials companies can’t increase prices of the commodities they sell to factories and property developers. That’s weighed down materials stocks—but it’s been a boon to the sector (and fund) we’ll discuss in a moment.

The other is energy, which has has been hit hard by the fall in oil. Just look at the price action with the Energy Select Sector SPDR (XLE) and WTI oil futures:

Low Oil and Lower Energy Stocks

While that’s bruising for the sector, it’s great for an economy like America’s, where energy demand from consumers and manufacturers is the main engine of growth. So XLE’s 12.7% loss should be seen as the rest of the economy’s gain.

What to Buy Now

That brings me to the sector I want to dive into today: real estate.

It’s a direct beneficiary of lower costs for energy and materials, because both lower property builders’ expenses, resulting in greater inventories for real estate investors and higher profits for real estate developers.

Secondly, the real estate sector has been brutalized because of fears of higher interest rates—fears that are proving to be wrong.

Rate Burden Gets Lighter

Over the last 3 years, the return on the Real Estate Select Sector SPDR (XLRE) has been less than half that of the broader market, for one reason: higher interest rates. Almost 3 years ago to the day, the Federal Reserve kicked off the current rate-hike cycle, and the real estate market freaked out (see the dip in the orange line in early 2016). It has only slightly recovered since—with several “mini-freakouts” along the way.

On Sale Now: An 8.7% Dividend With Upside

Now that rates are set to rise more slowly than previously expected, real estate is a particularly appealing “sleeper” sector, because the market still hasn’t gotten the message. You can compound your returns through a closed-end fund (CEF) like the Nuveen Real Estate Income Fund (JRS).

JRS invests in many companies that make up XLRE, but there’s one huge difference: JRS trades at a 10.2% discountto the market value of the companies it owns, while XLRE trades at the whole market value of its portfolio. So you can get this already very cheap sector at a discount!

Another great thing about JRS? Its income. With an 8.7% dividend yield, this fund trounces the still-impressive 3.6% dividend XLRE provides. So you’ll be pocketing a hefty income stream while you wait for the real estate market to come to its senses.

5 More “Must-Buy” 8%+ Dividends for 2019

Here’s the thing about 8.7% payouts like these: the pundits will tell you they’re unsafe, but that’s nonsense!

The truth is, dividends like these are absolutely necessary if you want to achieve the “retirement holy grail”: clocking out and living on dividends alone. Because when your dividends cover your bills (and then some!) and roll in like clockwork, who cares what Mr. Market gets up to on a day-to-day basis?

This is how everyone should approach retirement investing. And the good news is that there are plenty of CEFs—like JRS—throwing off rock-solid 8%+ payouts that will get you there.

But where do you start? Easy: with the 5 hidden gems (including one CEF paying an incredible 9% dividend) I’ll reveal when you click right here.

And before you ask, no, you won’t give up a cent of upside to get your hands on the 8% average payouts these 5 funds deliver. Take a look at how one of these buys—pick No. 3, to be exact—has manhandled the market since inception:

Market-Crushing Gains and 8.7% Dividends—in 1 Buy!

Source: Contrarian Outlook

Michael Foster has just uncovered 4 funds that tick off ALL his boxes for the perfect investment: a 7.4% average payout, steady dividend growth and 20%+ price upside. — but that won’t last long! Grab a piece of the action now, before the market comes to its senses. CLICK HERE and he’ll tell you all about his top 4 high-yield picks.