Head to Head Contrast: NexPoint Residential Trust (NXRT) versus Post Properties (PPS)
NexPoint Residential Trust (NYSE: NXRT) and Post Properties (NYSE:PPS) are both finance companies, but which is the superior investment? We will contrast the two businesses based on the strength of their analyst recommendations, valuation, institutional ownership, dividends, profitability, earnings and risk.
This table compares NexPoint Residential Trust and Post Properties’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|NexPoint Residential Trust||9.27%||5.39%||1.26%|
Institutional and Insider Ownership
57.6% of NexPoint Residential Trust shares are owned by institutional investors. Comparatively, 94.3% of Post Properties shares are owned by institutional investors. 16.6% of NexPoint Residential Trust shares are owned by company insiders. Comparatively, 2.2% of Post Properties shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.
Volatility & Risk
NexPoint Residential Trust has a beta of 0.84, suggesting that its share price is 16% less volatile than the S&P 500. Comparatively, Post Properties has a beta of 0.12, suggesting that its share price is 88% less volatile than the S&P 500.
This is a breakdown of current recommendations and price targets for NexPoint Residential Trust and Post Properties, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|NexPoint Residential Trust||0||1||2||0||2.67|
NexPoint Residential Trust currently has a consensus target price of $28.00, indicating a potential upside of 18.49%. Given NexPoint Residential Trust’s higher possible upside, equities analysts plainly believe NexPoint Residential Trust is more favorable than Post Properties.
NexPoint Residential Trust pays an annual dividend of $0.88 per share and has a dividend yield of 3.7%. Post Properties pays an annual dividend of $1.88 per share and has a dividend yield of 2.9%. NexPoint Residential Trust pays out 172.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Post Properties pays out 131.5% 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 raised its dividend for 6 consecutive years. NexPoint Residential Trust is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Valuation & Earnings
This table compares NexPoint Residential Trust and Post Properties’ gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|NexPoint Residential Trust||$137.90 million||3.61||$57.99 million||$0.51||46.33|
NexPoint Residential Trust has higher revenue and earnings than Post Properties. Post Properties 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.
NexPoint Residential Trust beats Post Properties on 7 of the 13 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.
Post Properties Company Profile
Post Properties, Inc. is a self-administrated and self-managed equity real estate investment trust (REIT). The Company’s segments include Fully stabilized (same store) communities, which includes apartment communities that have been stabilized for both the current and prior year; Newly stabilized communities, which includes communities that reached stabilized occupancy in the prior year; Lease-up communities, which includes communities that are under development, rehabilitation and in lease-up but were not stabilized by the beginning of the current year, including communities that stabilized during the current year; Acquired communities, which include communities acquired in the current or prior year, and Held for sale and sold communities, which include apartment and mixed-use communities classified as held for sale or sold. Its operating divisions include Post Apartment Management, Post Construction and Property Services, Post Investment Group and Post Corporate Services.
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