Comparing Sun Communities (SUI) & NexPoint Residential Trust (NXRT)
Sun Communities (NYSE: SUI) and NexPoint Residential Trust (NYSE:NXRT) are both finance companies, but which is the better stock? We will compare the two businesses based on the strength of their dividends, institutional ownership, risk, valuation, earnings, profitability and analyst recommendations.
Sun Communities pays an annual dividend of $2.68 per share and has a dividend yield of 3.0%. NexPoint Residential Trust pays an annual dividend of $0.88 per share and has a dividend yield of 3.7%. Sun Communities pays out 382.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. 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. NexPoint Residential Trust is clearly the better dividend stock, given its higher yield and lower payout ratio.
Earnings and Valuation
This table compares Sun Communities and NexPoint Residential Trust’s revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Sun Communities||$936.86 million||7.48||$443.91 million||$0.70||126.74|
|NexPoint Residential Trust||$137.90 million||3.65||$57.99 million||$0.51||46.94|
Sun Communities has higher revenue and earnings than NexPoint Residential Trust. NexPoint Residential Trust is trading at a lower price-to-earnings ratio than Sun Communities, indicating that it is currently the more affordable of the two stocks.
Insider and Institutional Ownership
94.3% of Sun Communities shares are held by institutional investors. Comparatively, 57.6% of NexPoint Residential Trust shares are held by institutional investors. 4.2% of Sun Communities shares are held by insiders. Comparatively, 16.6% of NexPoint Residential Trust shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.
This table compares Sun Communities and NexPoint Residential Trust’s 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%|
This is a summary of recent ratings and target prices for Sun Communities and NexPoint Residential Trust, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|NexPoint Residential Trust||0||1||2||0||2.67|
Sun Communities presently has a consensus target price of $91.33, suggesting a potential upside of 2.95%. NexPoint Residential Trust has a consensus target price of $28.00, suggesting a potential upside of 16.96%. Given NexPoint Residential Trust’s higher possible upside, analysts clearly believe NexPoint Residential Trust is more favorable than Sun Communities.
Volatility & Risk
Sun Communities has a beta of 0.3, meaning that its stock price is 70% less volatile than the S&P 500. Comparatively, NexPoint Residential Trust has a beta of 0.83, meaning that its stock price is 17% less volatile than the S&P 500.
NexPoint Residential Trust beats Sun Communities on 8 of the 15 factors compared between the two stocks.
About Sun Communities
Sun Communities, Inc. is a self-administered and self-managed real estate investment trust (REIT). The Company is a fully integrated real estate company, which, together with its affiliates and predecessors, has been in the business of acquiring, operating, developing, and expanding manufactured housing (MH) and recreational vehicle (RV). As of December 31, 2016, it owned and operated or had an interest in a portfolio of properties located throughout the United States and Ontario, Canada, including 226 MH communities, 87 RV communities, and 28 properties containing both MH and RV sites. The Company operates through two segments: Real Property Operations and Home Sales and Rentals. The Real Property Operations segment owns, operates, or has an interest in a portfolio, and develops MH communities and RV communities throughout the United States and is in the business of acquiring, operating, and expanding MH and RV communities.
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.
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