NexPoint Residential Trust (NYSE:NXRT) and Gladstone Land (NASDAQ:LAND) Head-To-Head Analysis

Gladstone Land (NASDAQ:LAND) and NexPoint Residential Trust (NYSE:NXRT) are both small-cap finance companies, but which is the better investment? We will contrast the two companies based on the strength of their institutional ownership, risk, profitability, earnings, dividends, analyst recommendations and valuation.

Profitability

This table compares Gladstone Land and NexPoint Residential Trust’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Gladstone Land	16.11%	1.99%	1.03%
NexPoint Residential Trust	27.02%	14.82%	3.49%

Analyst Ratings

This is a breakdown of current ratings for Gladstone Land and NexPoint Residential Trust, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Gladstone Land	0	1	0	0	2.00
NexPoint Residential Trust	1	2	2	0	2.20

NexPoint Residential Trust has a consensus price target of $37.25, suggesting a potential upside of 6.92%. Given NexPoint Residential Trust’s stronger consensus rating and higher possible upside, analysts clearly believe NexPoint Residential Trust is more favorable than Gladstone Land.

Dividends

Gladstone Land pays an annual dividend of $0.56 per share and has a dividend yield of 4.3%. NexPoint Residential Trust pays an annual dividend of $1.85 per share and has a dividend yield of 5.3%. Gladstone Land pays out -207.4% of its earnings in the form of a dividend. NexPoint Residential Trust pays out 65.4% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Gladstone Land has increased its dividend for 2 consecutive years and NexPoint Residential Trust has increased its dividend for 2 consecutive years.

Risk & Volatility

Gladstone Land has a beta of 1, meaning that its share price has a similar volatility profile to the S&P 500.Comparatively, NexPoint Residential Trust has a beta of 1.25, meaning that its share price is 25% more volatile than the S&P 500.

Earnings and Valuation

This table compares Gladstone Land and NexPoint Residential Trust’s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Gladstone Land	$90.40 million	5.17	$14.56 million	($0.27)	-48.33
NexPoint Residential Trust	$277.53 million	3.24	$44.26 million	$2.83	12.31

NexPoint Residential Trust has higher revenue and earnings than Gladstone Land. Gladstone Land 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.

Insider & Institutional Ownership

53.6% of Gladstone Land shares are owned by institutional investors. Comparatively, 76.6% of NexPoint Residential Trust shares are owned by institutional investors. 7.1% of Gladstone Land shares are owned by company insiders. Comparatively, 13.0% of NexPoint Residential Trust shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Summary

NexPoint Residential Trust beats Gladstone Land on 14 of the 16 factors compared between the two stocks.

About Gladstone Land

Founded in 1997, Gladstone Land is a publicly traded real estate investment trust that acquires and owns farmland and farm-related properties located in major agricultural markets in the U.S. and leases its properties to unrelated third-party farmers. The Company, which reports the aggregate fair value of its farmland holdings on a quarterly basis, currently owns 169 farms, comprised of approximately 116,000 acres in 15 different states and over 45,000 acre-feet of banked water in California, valued at a total of approximately $1.6 billion. Gladstone Land's farms are predominantly located in regions where its tenants are able to grow fresh produce annual row crops, such as berries and vegetables, which are generally planted and harvested annually. The Company also owns farms growing permanent crops, such as almonds, apples, cherries, figs, lemons, olives, pistachios, and other orchards, as well as blueberry groves and vineyards, which are generally planted every 20-plus years and harvested annually. Approximately 40% of the Company's fresh produce acreage is either organic or in transition to become organic, and over 10% of its permanent crop acreage falls into this category. The Company may also acquire property related to farming, such as cooling facilities, processing buildings, packaging facilities, and distribution centers. Gladstone Land pays monthly distributions to its stockholders and has paid 129 consecutive monthly cash distributions on its common stock since its initial public offering in January 2013. The Company has increased its common distributions 32 times over the prior 35 quarters, and the current per-share distribution on its common stock is $0.0464 per month, or $0.5568 per year.

About NexPoint Residential Trust

NexPoint Residential Trust is a publicly traded REIT, with its shares listed on the New York Stock Exchange under the symbol "NXRT," primarily focused on acquiring, owning and operating well-located middle-income multifamily properties with "value-add" potential in large cities and suburban submarkets of large cities, primarily in the Southeastern and Southwestern United States. NXRT is externally advised by NexPoint Real Estate Advisors, L.P., an affiliate of NexPoint Advisors, L.P., an SEC-registered investment advisor, which has extensive real estate experience.