Head to Head Review: NexPoint Residential Trust (NYSE:NXRT) and Morguard North American Residential Real Estate Investment Trust (OTCMKTS:MNARF)

NexPoint Residential Trust (NYSE:NXRT) and Morguard North American Residential Real Estate Investment Trust (OTCMKTS:MNARF) are both real estate companies, but which is the better business? We will contrast the two companies based on the strength of their profitability, dividends, analyst recommendations, institutional ownership, valuation, risk and earnings.

Earnings & Valuation

This table compares NexPoint Residential Trust and Morguard North American Residential Real Estate Investment Trust”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
NexPoint Residential Trust	$251.28 million	2.58	-$32.03 million	($1.33)	-19.07
Morguard North American Residential Real Estate Investment Trust	N/A	N/A	N/A	$1.39	8.70

Morguard North American Residential Real Estate Investment Trust has lower revenue, but higher earnings than NexPoint Residential Trust. NexPoint Residential Trust is trading at a lower price-to-earnings ratio than Morguard North American Residential Real Estate Investment Trust, indicating that it is currently the more affordable of the two stocks.

Dividends

NexPoint Residential Trust pays an annual dividend of $2.12 per share and has a dividend yield of 8.4%. Morguard North American Residential Real Estate Investment Trust pays an annual dividend of $0.60 per share and has a dividend yield of 5.0%. NexPoint Residential Trust pays out -159.4% of its earnings in the form of a dividend. Morguard North American Residential Real Estate Investment Trust pays out 43.2% 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. NexPoint Residential Trust has increased its dividend for 3 consecutive years. NexPoint Residential Trust is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Recommendations

This is a summary of recent recommendations for NexPoint Residential Trust and Morguard North American Residential Real Estate Investment Trust, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
NexPoint Residential Trust	2	2	0	1	2.00
Morguard North American Residential Real Estate Investment Trust	0	1	1	0	2.50

NexPoint Residential Trust currently has a consensus target price of $22.00, suggesting a potential downside of 13.26%. Given NexPoint Residential Trust’s higher possible upside, equities research analysts plainly believe NexPoint Residential Trust is more favorable than Morguard North American Residential Real Estate Investment Trust.

Institutional and Insider Ownership

76.6% of NexPoint Residential Trust shares are owned by institutional investors. Comparatively, 9.6% of Morguard North American Residential Real Estate Investment Trust shares are owned by institutional investors. 16.6% of NexPoint Residential Trust shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Profitability

This table compares NexPoint Residential Trust and Morguard North American Residential Real Estate Investment Trust’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
NexPoint Residential Trust	-13.22%	-11.75%	-1.79%
Morguard North American Residential Real Estate Investment Trust	N/A	N/A	N/A

Summary

NexPoint Residential Trust beats Morguard North American Residential Real Estate Investment Trust on 8 of the 15 factors compared between the two stocks.

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.

About Morguard North American Residential Real Estate Investment Trust

The REIT is an unincorporated, open-ended real estate investment trust established under and governed by the laws of the Province of Ontario. The Units of the REIT trade on the Toronto Stock Exchange under the ticker symbol MRG.UN. With a strategic focus on the acquisition of high-quality multi-suite residential properties in Canada and the United States, the REIT maximizes long-term Unit value through active asset and property management. The REIT’s portfolio is comprised of 13,089 residential suites and 229,500 square feet of commercial area (as of October 24, 2023) located in Alberta, Ontario, Colorado, Texas, Louisiana, Illinois, Georgia, Florida, North Carolina, Virginia and Maryland with an appraised value of approximately $4.0 billion at September 30, 2023.