6 Publicly Traded REITs Headquartered in Texas to Buy and Hold for the Long Term

Real estate investment trusts are unique companies that own and operate properties. Instead of issuing shares like a typical corporation, REITs sell trust certificates or share units. Each share represents an equity stake in the trust. As a result, investors can buy and sell shares on public stock exchanges just like any other company. As a result, investors should consider adding REITs to their portfolios for the added income and potential capital gains from real estate. 

In general, publicly listed REITs have outperformed the S&P 500 over time; however, you’ll want to look for certain characteristics before making an investment decision. For example, it’s recommended that you find a company with stable cash flows and predictable growth, so we’ve outlined six publicly traded Texas REITs to buy and hold for the long term.

American Campus Communities, Inc., Austin

This REIT owns, manages, and leases premier education and healthcare facilities in the U.S. In addition, it is one of the largest owners of college and university student housing properties in North America. The company has a wide range of tenants, and that diversity provides stable cash flows. American Campus Communities has increased its dividend each year since 2015, giving investors a reliable source of income. 

Over the last decade, the company’s dividend payments have increased at a compound annual growth rate of about 10%. The dividend payout ratio for the company is about 50%, which is sustainable given the low capital expenditures for the industry. With an above-average dividend yield of 4%, the company is also a good option for long-term investors seeking high-yielding stocks.

Ashford Hospitality Trust, Dallas

This REIT owns, manages, and leases hotels primarily in the U.S., U.K., and Europe. It also owns and manages an auxiliary hospitality business. The company has a wide range of tenants and a diverse geographic footprint, which helps to provide stable cash flows. Ashford Hospitality Trust has increased its dividend every year since its formation in 2011. The company has had a compound annual dividend growth rate of about 16% over the last decade. The current payout ratio for Ashford Hospitality Trust is about 85%, which is close to the industry average. 

Braemar Hotels & Resorts, Inc., Dallas

This REIT owns, develops, acquires, and operates hotels primarily in the U.S. The company has a wide range of tenants and a diverse geographic footprint, which helps to provide stable cash flows. Braemar Hotels & Resorts has increased its dividend every year since its formation in 2002. The dividend payments have grown at a compound annual growth rate of about 8% over the last decade. The current payout ratio for the company is 67%, which is slightly above the industry average. 

Camden Property Trust, Houston

This REIT owns, acquires, develops, and manages a wide range of commercial real estate properties in the U.S. and Europe. Camden Property Trust has a diversified portfolio of properties and tenants, which help to provide stable cash flows. The company has increased its dividend every year since the formation of the REIT in 2007. The dividend payments have grown at a compound annual growth rate of about 10% over the last decade. The current payout ratio for Camden Property Trust is about 90%, which is above the industry average. However, the company has high debt levels, which is concerning for investors.

CorePoint Lodging, Irving

This REIT owns and operates extended-stay hotels in the U.S. CorePoint Lodging has a wide range of tenants and a diverse geographic footprint, which helps to provide stable cash flows. The company has increased its dividend each year since 2013. The dividend payments have grown at a compound annual growth rate of about 19% over the last decade. The current dividend yield for the company is about 5%, which is sustainable given the low capital expenditures for the industry. 

Creative Media & Community Trust, Dallas

This REIT owns, acquires, and develops a wide range of real estate properties in the U.S., Europe, and Asia. The company has a diversified portfolio of properties and tenants, which help to provide stable cash flows. The company has increased its dividend every year since the formation of the REIT in 2007. The dividend payments have grown at a compound annual growth rate of about 10% over the last decade. The current payout ratio for Creative Media & Community Trust is about 44%, which is above the industry average. 

Conclusion

REITs are a type of investment vehicle representing shares in a trust that owns income-producing real estate. The real estate industry has been growing in recent years, leading to a large increase in publicly-traded real estate investment trusts or REITs. REITs are appealing because they offer a high yield and are generally considered safe. However, it is always important to do your homework before buying any investment. Ensure that the company has a strong business model and is well-positioned to succeed.