The world seems to be stuck with low interest rates these days. It's been a decade since the GFC and yet rates are still very low.
Our own central bank, the RBA, has had to join in with the low rates – hurting savers and rewarding borrowers. Low interest rates are the single biggest worry for me, it really alters the investment landscape and pushes up asset values.
But people still need income from their investments, so I think these three shares could be the answer:
Brickworks Limited (ASX: BKW)
Brickworks has maintained or grown its dividend each year since the late 1970s. That's a truly excellent record of dividend stability.
The business has been able to produce that consistency thanks to the long-term growth of its building products business and its 'investments' segment. In the past two decades it has diversified its assets by building industrial properties on the land it owned, in partnership with Goodman Group (ASX: GMG).
Brickworks is adding another string to its bow by acquiring brick manufacturers in the US. It's going to optimise the US brick plants over the next few years, which should be just in time for the start of the next US growth cycle.
It currently has a grossed-up dividend yield of 4.5%.
National Storage REIT (ASX: NSR)
National Storage is the largest self-storage business in Australia and New Zealand.
It could be one of the best ways to profit from a return to house price growth because that means it may be able to charge more for its storage units and it could also see the underlying value of its properties rise too.
Space in our cities will always have a value and National Storage is doing a good job of growing its rental prices, maintaining occupancy and finding good acquisition opportunities.
Its distribution is steadily climbing over time, it currently has a distribution yield of 5.2%.
Rural Funds Group (ASX: RFF)
The agriculture sector is taking a bit of beating at the moment because of drought conditions. However, as a landlord, Rural Funds doesn't have to worry about the shorter-term difficulties because it's the tenants that have to adjust to rough times (or benefit from the good times).
Rural Funds owns a significant amount of water entitlements to lease to its tenants for their needs.
The REIT owns a variety of farm types like cattle, cotton, almonds, macadamias and vineyards. I think this is a good diversification strategy.
Around half of Rural Funds' rental income grows at a fixed 2.5% increase per year, whilst the other half is linked to CPI inflation – which remains at an acceptable level.
Rural Funds aims to increase the distribution by 4% a year and has a FY20 distribution yield of 6%.
Foolish takeaway
At the current prices I'd go for Brickworks first and then Rural Funds. Brickworks is trading at attractive value if you take its assets at book value and its dividend record is excellent.
