December 23, 2011

How my HPT and HRP/CWH REIT Investments have Fared

I've had two major investments in REITs in my Roth IRA.   Hospitality Properties Trust (HPT)  and HRPT Properties Trust (HRP) which later changed name to CommonWealth REIT (CWH).    Both were part of my original high dividend stock strategy.   The idea was to buy stocks in my Roth that had good value and high dividends.   At that time in late 2008 it was not hard to find REITs with yields in the double digits and the REIT ETFs were paying 9% plus.    HRP & HPT were two REITs that I'd watched and evaluated for some time and I felt both were good buys.    Both of these REITs performed quite well and in fact within a year my HRP had doubled in value.


First the HPT: 
I bought my HPT stock in January 2009.  I paid $14.15 for it.   Today it trades for $22.21 and it has given me $4.37 per share total dividends so far.   In the time I've owned it my HPT has returned 23% annually.

Second the HRP / CWH: 
I originally bought HRP in November 2008 for $3.45.  I then sold about half my shares in Sept. 2009 when it hit $7.20.   I sold a third of the remaining shares in March 2010 at $8.    Then HRP changed their name to CWH and did a 1 for 4 split.   I've also gotten about 76¢ per original share in dividends total the period I've owned them. My original investment has doubled.   Altogether my originally investment in HRP is up around 26% annually in the 3 years I've held it.

Compared to benchmarks.
I will use SPDR S&P 500 (SPY) and Vanguard REIT Index ETF (VNQ) as benchmarks for my performance.

Here is how each of my REITS fared versus the benchmarks in the given time periods that I owned them :


HRP SPY VNQ
26% 9% 20%

and

HPT SPY VNQ
23% 10% 20%

While I beat the S&P 500 index pretty handily I only beat the REIT index by a few points.   Outperforming an industry index by 3% or 6% is still quite a bit.   I would have taken less risk with VNQ however.

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