Comparing Centerspace (NYSE:CSR) & NexPoint Residential Trust (NYSE:NXRT)

NexPoint Residential Trust (NYSE:NXRT) and Centerspace (NYSE:CSR) are both small-cap finance companies, but which is the better business? We will compare the two companies based on the strength of their earnings, valuation, risk, institutional ownership, dividends, profitability and analyst recommendations.

Dividends

NexPoint Residential Trust pays an annual dividend of $2.12 per share and has a dividend yield of 7.0%. Centerspace pays an annual dividend of $3.08 per share and has a dividend yield of 4.8%. NexPoint Residential Trust pays out -110.4% of its earnings in the form of a dividend. Centerspace pays out 172.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. NexPoint Residential Trust has increased its dividend for 3 consecutive years and Centerspace has increased its dividend for 2 consecutive years. NexPoint Residential Trust is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Risk and Volatility

NexPoint Residential Trust has a beta of 1.19, meaning that its share price is 19% more volatile than the S&P 500. Comparatively, Centerspace has a beta of 0.78, meaning that its share price is 22% less volatile than the S&P 500.

Valuation & Earnings

This table compares NexPoint Residential Trust and Centerspace”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
NexPoint Residential Trust	$252.99 million	3.05	$1.11 million	($1.92)	-15.85
Centerspace	$260.98 million	4.12	-$10.69 million	$1.79	35.96

NexPoint Residential Trust has higher earnings, but lower revenue than Centerspace. NexPoint Residential Trust is trading at a lower price-to-earnings ratio than Centerspace, indicating that it is currently the more affordable of the two stocks.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
NexPoint Residential Trust	-19.23%	-13.32%	-2.60%
Centerspace	11.14%	3.52%	1.54%

Institutional & Insider Ownership

76.6% of NexPoint Residential Trust shares are owned by institutional investors. Comparatively, 79.0% of Centerspace shares are owned by institutional investors. 15.4% of NexPoint Residential Trust shares are owned by insiders. Comparatively, 0.4% of Centerspace shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Analyst Ratings

This is a summary of recent ratings and recommmendations for NexPoint Residential Trust and Centerspace, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
NexPoint Residential Trust	1	7	0	0	1.88
Centerspace	0	6	2	0	2.25

NexPoint Residential Trust currently has a consensus target price of $39.88, indicating a potential upside of 31.02%. Centerspace has a consensus target price of $69.86, indicating a potential upside of 8.54%. Given NexPoint Residential Trust’s higher probable upside, equities research analysts clearly believe NexPoint Residential Trust is more favorable than Centerspace.

Summary

Centerspace beats NexPoint Residential Trust on 10 of the 17 factors compared between the two stocks.

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.

About Centerspace

Centerspace is an owner and operator of apartment communities committed to providing great homes by focusing on integrity and serving others. Founded in 1970, as of September 30, 2023, Centerspace owned interests in 71 apartment communities consisting of 12,785 apartment homes located in Colorado, Minnesota, Montana, Nebraska, North Dakota, and South Dakota. Centerspace was named a Top Workplace for the fourth consecutive year in 2023 by the Minneapolis Star Tribune.