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Camden Property: Sell Now And Come Back Later

Aug. 05, 2021 2:56 PM ETCamden Property Trust (CPT)4 Comments

Summary

  • Camden Property Trust is a high-quality Apartment REIT that's demonstrated strong rental growth rates.
  • It has an attractive development pipeline, and maintains a strong balance sheet and a well-covered dividend.
  • However, I find the valuation to be rather stretched, especially if it's unable to maintain the strong growth in lease rates.

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Quality comes at a price, but that doesn't mean investors should pay for quality at any price. After all, investing is about generating adequate long-term returns, which may be difficult to achieve when buying companies at nosebleed valuations.

This article was written by

Gen Alpha profile picture
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I am Gen Alpha. I have more than 14 years of investment experience, and an MBA in Finance. I focus on stocks that are more defensive in nature, with a medium- to long-term horizon.

I provide high-yield, dividend growth investment ideas in the investing group Hoya Capital Income Builder. The group helps investors achieve dependable monthly income, portfolio diversification, and inflation hedging. It provides investment research on REITs, ETFs, closed-end funds, preferreds, and dividend champions across asset classes. It offers income-focused portfolios targeting dividend yields up to 10%. Learn more.

Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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Comments (4)

toomuchgas profile picture
It's hard to find stuff that is undervalued. I have a $62 basis but I inherited the stock and just ignore have ignored it for for 10 years.
Russell A profile picture
Sell and move $$ into IRT? Lower priced sunbelt multi-family REIT.
theheckwithtech profile picture
With a cost basis of $96, I'll sit tight and add on any meaningful pullbacks of 5% or more.
Steven Miller profile picture
@theheckwithtech
My cost basis is not quite as good at $105, but I have similar thoughts. I see no reason for selling with the chart going up as it has been. As long as housing pricing is so extreme, I think there will be demand for apartments.

Long $CPT and $AVB.
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