Is Camden Property Trust a Stock to Buy and Hold Forever? Here's Why It Could Be.

Camden Property Trust (NYSE: CPT) is a real estate investment trust, or REIT, that specializes in multifamily properties. Its core property type is apartment communities in or near major U.S. cities. Including properties currently under construction, the company owns about 60,800 apartment homes in its portfolio.

The business grows through both acquisitions and developments, both of which can be excellent ways to create value for shareholders. It also strategically adds value to its properties through redevelopment, which includes renovations, upgrades, and added amenities, allowing the company to increase its rental income.

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Like most REITs, Camden Property Group is sensitive to interest rate fluctuations. Without getting too deep into the economics, REITs tend to perform well when rates are falling, and tend to underperform the market when rates rise. But overall, this is a business designed to produce steady rental income, even in challenging times.

A great stock for income and growth

Camden Property Trust is an excellent income stock, with a 3.5% dividend yield and dividend increases in most years throughout its history. However, it can also produce strong value creation (stock price growth) over time as the value of its properties increases, new developments are completed, and redevelopment efforts result in higher rent.

As a result, Camden is an excellent long-term total return investment. While it hasn't been a stellar performer in recent years due to its interest rate sensitivity, its long-term returns have been excellent. Over the past 30 years, the stock has produced a 2,530% total return – about 650 percentage points better than the S&P 500.

The bottom line is that Camden Property Trust can be a great long-term investment for income and growth, especially considering the opportunities created by the housing shortage in the United States.

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Matt Frankel has no position in any of the stocks mentioned. The Motley Fool recommends Camden Property Trust. The Motley Fool has a disclosure policy.