Gladstone Land (NASDAQ:LAND – Get Free Report) and NexPoint Residential Trust (NYSE:NXRT – Get Free Report) are both small-cap finance companies, but which is the superior business? We will contrast the two businesses based on the strength of their institutional ownership, earnings, valuation, dividends, profitability, risk and analyst recommendations.
Institutional & Insider Ownership
53.6% of Gladstone Land shares are owned by institutional investors. Comparatively, 76.6% of NexPoint Residential Trust shares are owned by institutional investors. 7.2% of Gladstone Land shares are owned by company insiders. Comparatively, 13.0% of NexPoint Residential Trust shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.
Profitability
This table compares Gladstone Land and NexPoint Residential Trust’s net margins, return on equity and return on assets.
Net Margins | Return on Equity | Return on Assets | |
Gladstone Land | 16.11% | 1.99% | 1.03% |
NexPoint Residential Trust | 27.02% | 14.82% | 3.49% |
Dividends
Analyst Ratings
This is a breakdown of current ratings and price targets for Gladstone Land and NexPoint Residential Trust, as reported by MarketBeat.com.
Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
Gladstone Land | 0 | 1 | 0 | 0 | 2.00 |
NexPoint Residential Trust | 1 | 2 | 2 | 0 | 2.20 |
NexPoint Residential Trust has a consensus target price of $37.25, suggesting a potential upside of 6.89%. Given NexPoint Residential Trust’s stronger consensus rating and higher possible upside, analysts clearly believe NexPoint Residential Trust is more favorable than Gladstone Land.
Earnings & Valuation
This table compares Gladstone Land and NexPoint Residential Trust’s revenue, earnings per share and valuation.
Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
Gladstone Land | $90.40 million | 5.12 | $14.56 million | ($0.27) | -47.85 |
NexPoint Residential Trust | $277.53 million | 3.24 | $44.26 million | $2.83 | 12.31 |
NexPoint Residential Trust has higher revenue and earnings than Gladstone Land. Gladstone Land is trading at a lower price-to-earnings ratio than NexPoint Residential Trust, indicating that it is currently the more affordable of the two stocks.
Volatility and Risk
Gladstone Land has a beta of 1, suggesting that its share price has a similar volatility profile to the S&P 500.Comparatively, NexPoint Residential Trust has a beta of 1.25, suggesting that its share price is 25% more volatile than the S&P 500.
Summary
NexPoint Residential Trust beats Gladstone Land on 14 of the 16 factors compared between the two stocks.
About Gladstone Land
Founded in 1997, Gladstone Land is a publicly traded real estate investment trust that acquires and owns farmland and farm-related properties located in major agricultural markets in the U.S. and leases its properties to unrelated third-party farmers. The Company, which reports the aggregate fair value of its farmland holdings on a quarterly basis, currently owns 169 farms, comprised of approximately 116,000 acres in 15 different states and over 45,000 acre-feet of banked water in California, valued at a total of approximately $1.6 billion. Gladstone Land's farms are predominantly located in regions where its tenants are able to grow fresh produce annual row crops, such as berries and vegetables, which are generally planted and harvested annually. The Company also owns farms growing permanent crops, such as almonds, apples, cherries, figs, lemons, olives, pistachios, and other orchards, as well as blueberry groves and vineyards, which are generally planted every 20-plus years and harvested annually. Approximately 40% of the Company's fresh produce acreage is either organic or in transition to become organic, and over 10% of its permanent crop acreage falls into this category. The Company may also acquire property related to farming, such as cooling facilities, processing buildings, packaging facilities, and distribution centers. Gladstone Land pays monthly distributions to its stockholders and has paid 129 consecutive monthly cash distributions on its common stock since its initial public offering in January 2013. The Company has increased its common distributions 32 times over the prior 35 quarters, and the current per-share distribution on its common stock is $0.0464 per month, or $0.5568 per year.
About NexPoint Residential Trust
NexPoint Residential Trust is a publicly traded REIT, with its shares listed on the New York Stock Exchange under the symbol "NXRT," primarily focused on acquiring, owning and operating well-located middle-income multifamily properties with "value-add" potential in large cities and suburban submarkets of large cities, primarily in the Southeastern and Southwestern United States. NXRT is externally advised by NexPoint Real Estate Advisors, L.P., an affiliate of NexPoint Advisors, L.P., an SEC-registered investment advisor, which has extensive real estate experience.
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