Financial Review: NexPoint Residential Trust (NXRT) and Its Competitors

NexPoint Residential Trust (NYSE:NXRT) is one of 57 public companies in the “Residential REITs” industry, but how does it weigh in compared to its rivals? We will compare NexPoint Residential Trust to similar businesses based on the strength of its institutional ownership, earnings, profitability, risk, dividends, valuation and analyst recommendations.

Profitability

This table compares NexPoint Residential Trust and its rivals’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
NexPoint Residential Trust	-14.59%	-14.29%	-1.98%
NexPoint Residential Trust Competitors	11.22%	2.89%	2.58%

Dividends

NexPoint Residential Trust pays an annual dividend of $2.12 per share and has a dividend yield of 13.7%. NexPoint Residential Trust pays out -144.2% of its earnings in the form of a dividend. As a group, “Residential REITs” companies pay a dividend yield of 4.7% and pay out 188.8% of their earnings in the form of a dividend. NexPoint Residential Trust has raised its dividend for 3 consecutive years. NexPoint Residential Trust is clearly a better dividend stock than its rivals, given its higher yield and lower payout ratio.

Analyst Recommendations

This is a summary of current recommendations for NexPoint Residential Trust and its rivals, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
NexPoint Residential Trust	3	3	0	0	1.50
NexPoint Residential Trust Competitors	623	3276	3383	147	2.41

NexPoint Residential Trust presently has a consensus target price of $20.50, suggesting a potential upside of 32.43%. As a group, “Residential REITs” companies have a potential upside of 12.57%. Given NexPoint Residential Trust’s higher probable upside, equities analysts plainly believe NexPoint Residential Trust is more favorable than its rivals.

Risk and Volatility

NexPoint Residential Trust has a beta of 1.15, suggesting that its stock price is 15% more volatile than the S&P 500. Comparatively, NexPoint Residential Trust’s rivals have a beta of 0.68, suggesting that their average stock price is 32% less volatile than the S&P 500.

Insider & Institutional Ownership

76.6% of NexPoint Residential Trust shares are held by institutional investors. Comparatively, 55.8% of shares of all “Residential REITs” companies are held by institutional investors. 16.6% of NexPoint Residential Trust shares are held by company insiders. Comparatively, 8.5% of shares of all “Residential REITs” companies are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Valuation and Earnings

This table compares NexPoint Residential Trust and its rivals top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
NexPoint Residential Trust	$251.97 million	-$32.03 million	-10.53
NexPoint Residential Trust Competitors	$780.46 million	$238.42 million	37.53

NexPoint Residential Trust’s rivals have higher revenue and earnings than NexPoint Residential Trust. NexPoint Residential Trust is trading at a lower price-to-earnings ratio than its rivals, indicating that it is currently more affordable than other companies in its industry.

Summary

NexPoint Residential Trust rivals beat NexPoint Residential Trust on 9 of the 15 factors compared.

About NexPoint Residential Trust

NexPoint Residential Trust, Inc. is a publicly traded real estate investment trust that owns and operates multifamily apartment communities in the United States. Its portfolio is concentrated in markets across the Southeast and Southwest. The company focuses primarily on garden-style apartment properties and pursues a value-add strategy, investing in renovations and operational improvements intended to enhance its communities. Its properties provide rental housing, including options aimed at middle-income residents.