TPG RE Finance Trust (NYSE:TRTX – Get Free Report) and NexPoint Real Estate Finance (NYSE:NREF – Get Free Report) are both small-cap finance companies, but which is the better business? We will compare the two businesses based on the strength of their dividends, valuation, analyst recommendations, institutional ownership, profitability, risk and earnings.
Profitability
This table compares TPG RE Finance Trust and NexPoint Real Estate Finance’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| TPG RE Finance Trust | -30.16% | -21.48% | -5.41% |
| NexPoint Real Estate Finance | 23.44% | 9.51% | 0.46% |
Institutional and Insider Ownership
57.1% of TPG RE Finance Trust shares are held by institutional investors. Comparatively, 67.8% of NexPoint Real Estate Finance shares are held by institutional investors. 2.5% of TPG RE Finance Trust shares are held by insiders. Comparatively, 54.0% of NexPoint Real Estate Finance shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.
Volatility and Risk
Analyst Ratings
This is a summary of recent ratings and target prices for TPG RE Finance Trust and NexPoint Real Estate Finance, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| TPG RE Finance Trust | 1 | 1 | 3 | 0 | 2.40 |
| NexPoint Real Estate Finance | 0 | 1 | 0 | 1 | 3.00 |
TPG RE Finance Trust currently has a consensus price target of $7.70, indicating a potential upside of 0.98%. NexPoint Real Estate Finance has a consensus price target of $16.50, indicating a potential upside of 26.34%. Given NexPoint Real Estate Finance’s stronger consensus rating and higher possible upside, analysts plainly believe NexPoint Real Estate Finance is more favorable than TPG RE Finance Trust.
Earnings & Valuation
This table compares TPG RE Finance Trust and NexPoint Real Estate Finance’s gross revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| TPG RE Finance Trust | $122.07 million | 4.86 | -$116.63 million | ($1.69) | -4.51 |
| NexPoint Real Estate Finance | $68.36 million | 3.36 | $13.98 million | $0.65 | 20.09 |
NexPoint Real Estate Finance has lower revenue, but higher earnings than TPG RE Finance Trust. TPG RE Finance Trust is trading at a lower price-to-earnings ratio than NexPoint Real Estate Finance, indicating that it is currently the more affordable of the two stocks.
Dividends
TPG RE Finance Trust pays an annual dividend of $0.96 per share and has a dividend yield of 12.6%. NexPoint Real Estate Finance pays an annual dividend of $2.00 per share and has a dividend yield of 15.3%. TPG RE Finance Trust pays out -56.8% of its earnings in the form of a dividend. NexPoint Real Estate Finance pays out 307.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.
Summary
NexPoint Real Estate Finance beats TPG RE Finance Trust on 12 of the 17 factors compared between the two stocks.
About TPG RE Finance Trust
TPG RE Finance Trust, Inc., a commercial real estate finance company, originates, acquires, and manages commercial mortgage loans and other commercial real estate-related debt instruments in the United States. It invests in commercial mortgage loans; subordinate mortgage interests, mezzanine loans, secured real estate securities, note financing, preferred equity, and miscellaneous debt instruments; and commercial real estate collateralized loan obligations and commercial mortgage-backed securities secured by properties primarily in the multifamily, life science, mixed-use, hospitality, self storage, industrial, and retail real estate sectors. The company qualifies as a real estate investment trust for federal income tax purposes. It generally would not be subject to federal corporate income taxes if it distributes at least 90% of its taxable income to its stockholders. TPG RE Finance Trust, Inc. was incorporated in 2014 and is based in New York, New York.
About NexPoint Real Estate Finance
NexPoint Real Estate Finance, Inc. operates as a commercial mortgage real estate investment trust in the United States. It focuses on originating, structuring, and investing in first-lien mortgage loans, mezzanine loans, preferred equity, convertible notes, multifamily properties, and common equity investments, as well as multifamily and single-family rental commercial mortgage-backed securities securitizations, multifamily structured credit risk notes, and mortgage-backed securities or target assets. The company has elected to be taxed as a real estate investment trust (REIT) and would not be subject to federal corporate income taxes if it distributes at least 90% of its taxable income to its stockholders. NexPoint Real Estate Finance, Inc. was incorporated in 2019 and is based in Dallas, Texas.
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