NexPoint Real Estate Finance (NASDAQ:ONEW) and Advance Auto Parts (NYSE:AAP) are both consumer discretionary companies, but which is the better business? We will contrast the two businesses based on the strength of their risk, valuation, analyst recommendations, dividends, institutional ownership, profitability and earnings.

Profitability

This table compares NexPoint Real Estate Finance and Advance Auto Parts’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
NexPoint Real Estate Finance N/A N/A N/A
Advance Auto Parts 5.01% 16.41% 5.22%

Earnings & Valuation

This table compares NexPoint Real Estate Finance and Advance Auto Parts’ gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
NexPoint Real Estate Finance N/A N/A N/A N/A N/A
Advance Auto Parts $9.71 billion 0.64 $486.90 million $8.19 11.03

Advance Auto Parts has higher revenue and earnings than NexPoint Real Estate Finance.

Analyst Ratings

This is a breakdown of current recommendations for NexPoint Real Estate Finance and Advance Auto Parts, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
NexPoint Real Estate Finance 0 0 3 0 3.00
Advance Auto Parts 1 10 8 0 2.37

NexPoint Real Estate Finance presently has a consensus target price of $20.00, suggesting a potential upside of 203.03%. Advance Auto Parts has a consensus target price of $155.07, suggesting a potential upside of 71.60%. Given NexPoint Real Estate Finance’s stronger consensus rating and higher possible upside, analysts clearly believe NexPoint Real Estate Finance is more favorable than Advance Auto Parts.

Institutional and Insider Ownership

98.6% of Advance Auto Parts shares are owned by institutional investors. 4.7% of Advance Auto Parts shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Summary

Advance Auto Parts beats NexPoint Real Estate Finance on 7 of the 9 factors compared between the two stocks.

About NexPoint Real Estate Finance

OneWater Marine Inc. operates as a recreational boat retailer in the United States. It offers new and pre-owned recreational boats and yachts, as well as related marine products, such as parts and accessories. The company also provides boat repair and maintenance services; arranges boat financing and insurance; and other ancillary services, including indoor and outdoor storage, and marina, as well as rental of boats and personal watercraft. As of October 21, 2019, it operated 63 stores comprising 21 dealer groups in 11 states. The company was founded in 2014 and is headquartered in Buford, Georgia.

About Advance Auto Parts

Advance Auto Parts, Inc. provides automotive replacement parts, accessories, batteries, and maintenance items for domestic and imported cars, vans, sport utility vehicles, and light and heavy duty trucks. The company offers battery accessories, belts and hoses, brakes and brake pads, chassis and climate control parts, clutches and drive shafts, engines and engine parts, exhaust systems and parts, hub assemblies, ignition components and wires, radiators and cooling parts, starters and alternators, and steering and alignment parts. It also offers air conditioning chemicals and accessories, air fresheners, antifreeze and washer fluids, electrical wires and fuses, electronics, floor mats, seat covers, interior accessories, hand and specialty tools, lighting products, performance parts, sealants, adhesives and compounds, tire repair accessories, vent shades, mirrors and exterior accessories, washes, waxes and cleaning supplies, and wiper blades. In addition, the company offers air filters, fuel and oil additives, fuel filters, grease and lubricants, motor oils, oil filters, part cleaners and treatments, and transmission fluids for engine maintenance. Further, it offers battery and wiper installation, battery charging, engine light reading checking, electrical system testing, video clinic, oil and battery recycling, and loaner tool program services. Additionally, the company sells its products through its Website. It serves professional installers and do-it-yourself customers. As of December 29, 2018, the company operated 4,966 stores and 143 branches under the Advance Auto Parts, Autopart International, Carquest, and Worldpac brand names in the United States, Puerto Rico, the U.S. Virgin Islands, and Canada; and served 1,231 independently owned Carquest branded stores in Mexico, the Bahamas, Turks and Caicos, the British Virgin Islands, and the Pacific Islands. Advance Auto Parts, Inc. was founded in 1929 and is based in Raleigh, North Carolina.

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