NexPoint Residential Trust (NYSE: NXRT) and Reis (NASDAQ:REIS) are both small-cap finance companies, but which is the better business? We will contrast the two companies based on the strength of their earnings, institutional ownership, dividends, analyst recommendations, profitability, valuation and risk.
This is a summary of recent recommendations and price targets for NexPoint Residential Trust and Reis, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|NexPoint Residential Trust||0||1||4||0||2.80|
Institutional and Insider Ownership
59.7% of NexPoint Residential Trust shares are held by institutional investors. Comparatively, 58.5% of Reis shares are held by institutional investors. 19.0% of NexPoint Residential Trust shares are held by company insiders. Comparatively, 21.6% of Reis shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.
Risk and Volatility
NexPoint Residential Trust has a beta of 0.85, meaning that its share price is 15% less volatile than the S&P 500. Comparatively, Reis has a beta of 1.14, meaning that its share price is 14% more volatile than the S&P 500.
Valuation and Earnings
This table compares NexPoint Residential Trust and Reis’ gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|NexPoint Residential Trust||$144.24 million||3.47||$53.37 million||$2.48||9.63|
|Reis||$48.19 million||5.16||-$3.15 million||($0.28)||-76.78|
NexPoint Residential Trust has higher revenue and earnings than Reis. Reis 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.
This table compares NexPoint Residential Trust and Reis’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|NexPoint Residential Trust||37.00%||23.02%||4.98%|
NexPoint Residential Trust pays an annual dividend of $1.00 per share and has a dividend yield of 4.2%. Reis pays an annual dividend of $0.76 per share and has a dividend yield of 3.5%. NexPoint Residential Trust pays out 40.3% of its earnings in the form of a dividend. Reis pays out -271.4% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. NexPoint Residential Trust 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.
NexPoint Residential Trust beats Reis on 13 of the 17 factors compared between the two stocks.
NexPoint Residential Trust Company Profile
NexPoint Residential Trust, Inc. is an externally managed real estate investment trust (REIT). The Company’s investment objectives are to maximize the cash flow and value of properties owned, acquire properties with cash flow growth potential, provide quarterly cash distributions and achieve long-term capital appreciation for its stockholders through targeted management and a value-add program. The Company is focused on multifamily investments primarily located in the Southeastern and Southwestern United States. All of the Company’s business operations are conducted through NexPoint Residential Trust Operating Partnership, L.P. (OP). The sole limited partner of the OP is the Company. Its subsidiary, NexPoint Residential Trust Operating Partnership GP, LLC, is the sole general partner of the OP. As of December 31, 2016, the Company owned 39 properties representing 12,965 units in eight states, including two Parked Assets. The Company’s advisor is NexPoint Real Estate Advisors, L.P.
Reis Company Profile
Reis, Inc., through its subsidiary, Reis Services, provides commercial real estate market information and analytical tools to real estate professionals in the United States. The company maintains a proprietary database containing information on commercial properties, including apartment, office, retail, warehouse/distribution, flex/research and development, self-storage, and seniors and student housing properties in the metropolitan markets and neighborhoods. Its data is used by real estate investors, lenders, and other professionals to make informed buying, selling, and financing decisions; and debt and equity investors to assess, quantify, and manage the risks of default and loss associated with individual mortgages, properties, portfolios, and real estate backed securities. The company's product portfolio features Reis SE, a flagship delivery platform aimed at larger and mid-sized enterprises; Reis Portfolio CRE and other portfolio support products and services aimed at risk managers and credit administrators at banks and non-bank lending institutions; and ReisReports aimed at prosumers and smaller enterprises. Its products offer online access to a proprietary database of commercial real estate information and analytical tools designed to facilitate debt and equity transactions, and ongoing asset and portfolio evaluations; and access to market trends and forecasts at metropolitan and neighborhood levels, as well as building-specific information, such as rents, vacancy rates, lease terms, property sales, new construction listings, property valuation estimates, and property level tax information. The company serves various lending institutions, equity investors, brokers, and appraisers. The company was formerly known as Wellsford Real Properties, Inc. and changed its name to Reis, Inc. in May 2007. Reis, Inc. was founded in 1980 and is based in New York, New York.
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