NexPoint Real Estate Finance (NYSE:NREF – Get Rating) and Retail Opportunity Investments (NASDAQ:ROIC – Get Rating) are both finance companies, but which company is better? We’ll compare the two companies based on their dividend strength, analyst recommendations, risk, institutional ownership, earnings, valuation, and profitability.
This table compares the net margins, return on equity and return on assets of NexPoint Real Estate Finance and Retail Opportunity Investments.
|Net margins||Return on equity||return on assets|
|NexPoint Real Estate Financing||61.05%||15.94%||0.47%|
|Retail Opportunity Investments||19.81%||4.26%||1.99%|
Risk and Volatility
NexPoint Real Estate Finance has a beta of 1.56, meaning its stock price is 56% more volatile than the S&P 500. In comparison, Retail Opportunity Investments has a beta of 1.38, meaning its stock price is 38% more volatile than the S&P 500. .
Insider and Institutional Ownership
74.3% of NexPoint Real Estate Finance shares are held by institutional investors. By comparison, 96.2% of the shares of Retail Opportunity Investments are held by institutional investors. 48.0% of NexPoint Real Estate Finance shares are held by insiders. By comparison, 2.8% of the shares of Retail Opportunity Investments are held by insiders. Strong institutional ownership is an indication that endowments, large money managers, and hedge funds believe a company is poised for long-term growth.
This is a summary of recent recommendations for NexPoint Real Estate Finance and Retail Opportunity Investments, as reported by MarketBeat.com.
|Sales Ratings||Hold odds||Buy reviews||Strong buy odds||Rating|
|NexPoint Real Estate Financing||0||0||1||1||3.50|
|Retail Opportunity Investments||1||1||1||0||2.00|
NexPoint Real Estate Finance currently has a consensus target price of $24.00, suggesting a potential downside of 0.04%. Retail Opportunity Investments has a consensus target price of $19.00, suggesting a potential upside of 6.80%. Given the likely higher upside of Retail Opportunity Investments, analysts clearly believe that Retail Opportunity Investments is more favorable than NexPoint Real Estate Finance.
Benefits and evaluation
This table compares NexPoint Real Estate Finance and Retail Opportunity Investments revenue, earnings per share, and valuation.
|Gross revenue||Price/sales ratio||Net revenue||Earnings per share||Price/earnings ratio|
|NexPoint Real Estate Financing||$55.83 million||6.27||$43.08 million||$3.48||6.90|
|Retail Opportunity Investments||$284.10 million||7.78||$53.51 million||$0.47||37.85|
Retail Opportunity Investments has higher revenue and profit than NexPoint Real Estate Finance. NexPoint Real Estate Finance trades at a lower price-to-earnings ratio than Retail Opportunity Investments, indicating that it is currently the more affordable of the two stocks.
NexPoint Real Estate Finance pays an annual dividend of $2.00 per share and has a dividend yield of 8.3%. Retail Opportunity Investments pays an annual dividend of $0.52 per share and has a dividend yield of 2.9%. NexPoint Real Estate Finance returns 57.5% of its profits in the form of a dividend. Retail Opportunity Investments pays out 110.6% of its earnings as a dividend, suggesting it may not have enough earnings to cover its dividend payment in the future. NexPoint Real Estate Finance has increased its dividend for 2 consecutive years and Retail Opportunity Investments has increased its dividend for 1 consecutive year. 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 Retail Opportunity Investments on 10 out of 17 factors compared between the two stocks.
About NexPoint Real Estate Financing (Get a rating)
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.
About Investing in Retail Opportunities (Get a rating)
Retail Opportunity Investments Corp. (NASDAQ: ROIC), is a fully integrated, self-managed real estate investment trust (REIT) that specializes in the acquisition, ownership and management of grocery-anchored shopping centers located in densely populated metropolitan markets across the coast west. As of September 30, 2020, ROIC owned 88 shopping centers covering approximately 10.1 million square feet. ROIC is the largest mall REIT anchored in a publicly traded grocery store and focused exclusively on the West Coast. ROIC is a member of the S&P SmallCap 600 Index and has investment grade corporate debt ratings from Moody’s Investor Services, S&P Global Ratings and Fitch Ratings, Inc.
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