NexPoint Real Estate Finance (NYSE:NREF) and Service Properties Trust (NASDAQ:SVC) face to face
NexPoint real estate financing (NYSE: NREF – Get an assessment) and Service Properties Trust (NASDAQ: SVC – Get an assessment) are both small-cap finance companies, but which business is superior? We’ll compare the two companies based on valuation strength, profitability, earnings, dividends, institutional ownership, analyst recommendations and risk.
Insider and Institutional Ownership
74.3% of NexPoint Real Estate Finance shares are held by institutional investors. By comparison, 79.6% of Service Properties Trust’s shares are held by institutional investors. 48.0% of NexPoint Real Estate Finance shares are held by insiders. By comparison, 1.3% of Service Properties Trust’s shares are held by insiders. Strong institutional ownership indicates that hedge funds, large fund managers, and endowments believe a stock is poised for long-term growth.
This table compares net margins, return on equity and return on assets of NexPoint Real Estate Finance and Service Properties Trust.
|Net margins||Return on equity||return on assets|
|NexPoint Real Estate Financing||61.05%||15.94%||0.47%|
|Approving service properties||-28.83%||-28.63%||-5.09%|
Valuation and benefits
This table compares NexPoint Real Estate Finance and Service Properties Trust’s gross revenue, earnings per share (EPS), and valuation.
|Gross revenue||Price/sales ratio||Net revenue||Earnings per share||Price/earnings ratio|
|NexPoint Real Estate Financing||$55.83 million||5.45||$43.08 million||$3.48||5.99|
|Approving service properties||$1.50 billion||0.60||-$544.60 million||($2.85)||-1.89|
NexPoint Real Estate Finance has higher revenue, but lower revenue than Service Properties Trust. Service Properties Trust trades at a lower price-to-earnings ratio than NexPoint Real Estate Finance, indicating that it is currently the more affordable of the two stocks.
This is a breakdown of current ratings and target prices for NexPoint Real Estate Finance and Service Properties Trust, as provided by MarketBeat.
|Sales Ratings||Hold odds||Buy reviews||Strong buy odds||Rating|
|NexPoint Real Estate Financing||0||0||1||1||3.50|
|Approving service properties||1||1||1||0||2.00|
NexPoint Real Estate Finance currently has a consensus target price of $24.00, indicating a potential upside of 15.11%. Service Properties Trust has a consensus target price of $8.63, indicating a potential upside of 59.72%. Given Service Properties Trust’s likely higher upside, analysts clearly believe that Service Properties Trust is more favorable than NexPoint Real Estate Finance.
Risk and Volatility
NexPoint Real Estate Finance has a beta of 1.59, indicating that its stock price is 59% more volatile than the S&P 500. In comparison, Service Properties Trust has a beta of 2.11, indicating that the stock price of its stock is 111% more volatile than the S&P 500. .
NexPoint Real Estate Finance pays an annual dividend of $2.00 per share and has a dividend yield of 9.6%. Service Properties Trust pays an annual dividend of $0.04 per share and has a dividend yield of 0.7%. NexPoint Real Estate Finance returns 57.5% of its profits in the form of a dividend. Service Properties Trust distributes -1.4% of its profits as a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings over the next few years. NexPoint Real Estate Finance has increased its dividend for 2 consecutive years. NexPoint Real Estate Finance is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
NexPoint Real Estate Finance beats Service Properties Trust on 12 out of 17 factors compared between the two stocks.
NexPoint Real Estate Finance Company Profile (Get an assessment)
NexPoint Real Estate Finance, Inc. operates as a real estate finance company in the United States. It focuses on originating, structuring and investing in first mortgage loans, mezzanine loans, preferred stocks and preferred shares, as well as securitizations of multi-family commercial mortgage-backed securities. The Company intends to qualify as a real estate investment trust for US federal income tax purposes. It would generally not be subject to federal corporate income tax if it distributed at least 90% of its taxable income to its shareholders. The company was incorporated in 2019 and is based in Dallas, Texas.
Service Properties Trust Company Profile (Get an assessment)
Service Properties Trust is a real estate investment trust, or REIT, that owns a diversified portfolio of hotels, net rental services and necessity-based retail properties in the United States, Puerto Rico and Canada, with 149 distinct brands in 23 sectors. SVC’s properties are primarily operated under long-term management or lease agreements. SVC is managed by the operating subsidiary of The RMR Group Inc. (Nasdaq: RMR), or RMR Inc., an alternative asset management company headquartered in Newton, Massachusetts.
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