10 Best Residential Real Estate Stocks To Buy

5. Camden Property Trust (NYSE:CPT)

Number of Hedge Fund Holders: 35

Camden Property Trust (NYSE:CPT) is a REIT that serves as one of the largest publicly traded multifamily companies in the United States. The company engages in the ownership, management, development, redevelopment, acquisition, and construction of multifamily apartment communities in the country. It owned and operated 172 properties comprising 58,250 apartment homes as of August 31, 2024.

Camden Property Trust (NYSE:CPT) focuses on high-growth markets boasting robust employment and population growth, from where it derives over 95% of its net operating income. The REIT operates a diverse portfolio of assets with more than 58,000 apartment homes positioned in 15 major US markets. Camden’s resident profile is high quality with an average annual household income of approximately $121,000 and an average rent-to-income ratio of 19% for new move‐ins in 2024 to date. Furthermore, it has delivered consistent earnings and dividend growth since 2020.

With a strong demand for multifamily rental housing, the market trends align in the favor of the company. Net apartment demand was over 200,000 apartments during the first half of the year. Nearly 70% of young adults choose to rent while pent-up demand is also coming from those young adults living at home. The homeownership rate for these adults is significantly low and the propensity to rent stands high in Camden markets. The share opting for apartments is also increasing as more households are making the choice to live alone.

For the year’s second quarter, the REIT reported a core FFO of $1.71 per share which was $0.04 ahead of the midpoint of its prior quarterly guidance. Development activity remained strong. Camden completed construction on an 189-unit $71 million single-family rental community situated in Texas while beginning construction of a 420-unit $163 million 4-story garden-style new development, and a 349-unit $154 million 3-story garden-style new development.

With the monthly cost of owning a home almost 60% more than leasing an apartment, the market seems promising for Camden Property Trust (NYSE:CPT). Considering the firm’s aforementioned successful strategy and the tailwinds, it is an attractive residential real estate company to consider.