Head to Head Comparison: NexPoint Residential Trust (NXRT) and Colony Starwood Homes (SFR)
NexPoint Residential Trust (NYSE: NXRT) and Colony Starwood Homes (NYSE:SFR) are both finance companies, but which is the superior investment? We will compare the two businesses based on the strength of their institutional ownership, analyst recommendations, dividends, profitability, earnings, risk and valuation.
Volatility & Risk
NexPoint Residential Trust has a beta of 0.82, meaning that its share price is 18% less volatile than the S&P 500. Comparatively, Colony Starwood Homes has a beta of 0.93, meaning that its share price is 7% less volatile than the S&P 500.
NexPoint Residential Trust pays an annual dividend of $0.88 per share and has a dividend yield of 3.8%. Colony Starwood Homes pays an annual dividend of $0.88 per share and has a dividend yield of 2.4%. 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. Colony Starwood Homes pays out -266.7% of its earnings in the form of a dividend.
Earnings and Valuation
This table compares NexPoint Residential Trust and Colony Starwood Homes’ top-line revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|NexPoint Residential Trust||$137.90 million||3.56||$57.99 million||$0.51||45.71|
|Colony Starwood Homes||$599.75 million||6.33||$315.66 million||($0.33)||-113.24|
Colony Starwood Homes has higher revenue and earnings than NexPoint Residential Trust. Colony Starwood Homes 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.
This is a breakdown of current ratings and recommmendations for NexPoint Residential Trust and Colony Starwood Homes, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|NexPoint Residential Trust||0||0||2||0||3.00|
|Colony Starwood Homes||0||5||7||0||2.58|
NexPoint Residential Trust presently has a consensus price target of $28.00, suggesting a potential upside of 20.12%. Colony Starwood Homes has a consensus price target of $36.58, suggesting a potential downside of 2.11%. Given NexPoint Residential Trust’s stronger consensus rating and higher possible upside, equities research analysts plainly believe NexPoint Residential Trust is more favorable than Colony Starwood Homes.
Insider & Institutional Ownership
57.6% of NexPoint Residential Trust shares are held by institutional investors. 16.6% of NexPoint Residential Trust shares are held by company insiders. Comparatively, 5.0% of Colony Starwood Homes shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.
This table compares NexPoint Residential Trust and Colony Starwood Homes’ 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%|
|Colony Starwood Homes||-5.65%||-0.81%||-0.34%|
NexPoint Residential Trust beats Colony Starwood Homes on 9 of the 15 factors compared between the two stocks.
About NexPoint Residential Trust
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.
About Colony Starwood Homes
Starwood Waypoint Homes, formerly Colony Starwood Homes, is an internally managed real estate investment trust (REIT). The Company was formed primarily to acquire, renovate, lease and manage residential assets in select markets across the United States. It is focused on acquiring single-family rental (SFR) homes through a variety of channels, renovating these homes to the extent necessary and leasing them to qualified residents. The Company operates through two segments, which are represented by its portfolio of SFR homes and its portfolio of NPLs owned in the joint venture with Prime Asset Fund VI, LLC (Prime). The Company identifies and pursues individual home acquisition opportunities through various sources, including multiple listing services (MLS) listings, foreclosure auctions and short sales. As of December 31, 2016, its SFR portfolio consisted of 31,684 owned homes, including 31,065 rental homes and 619 homes that it does not intend to hold for the long term.
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