Head to Head Analysis: NexPoint Real Estate Finance (NYSE:NREF) and ACRES Commercial Realty (NYSE:ACR)

ACRES Commercial Realty (NYSE:ACR) and NexPoint Real Estate Finance (NYSE:NREF) are both small-cap finance companies, but which is the better business? We will compare the two businesses based on the strength of their profitability, dividends, institutional ownership, earnings, valuation, risk and analyst recommendations.

Institutional & Insider Ownership

40.0% of ACRES Commercial Realty shares are owned by institutional investors. Comparatively, 67.8% of NexPoint Real Estate Finance shares are owned by institutional investors. 4.6% of ACRES Commercial Realty shares are owned by company insiders. Comparatively, 59.9% of NexPoint Real Estate Finance shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Profitability

This table compares ACRES Commercial Realty and NexPoint Real Estate Finance’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
ACRES Commercial Realty	22.62%	2.42%	0.58%
NexPoint Real Estate Finance	107.93%	12.72%	0.92%

Valuation and Earnings

This table compares ACRES Commercial Realty and NexPoint Real Estate Finance”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
ACRES Commercial Realty	$79.95 million	1.33	$21.32 million	($1.12)	-13.30
NexPoint Real Estate Finance	$89.95 million	3.62	$105.10 million	$2.37	7.29

NexPoint Real Estate Finance has higher revenue and earnings than ACRES Commercial Realty. ACRES Commercial Realty 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.

Volatility and Risk

ACRES Commercial Realty has a beta of 1.08, meaning that its share price is 8% more volatile than the S&P 500. Comparatively, NexPoint Real Estate Finance has a beta of 1.11, meaning that its share price is 11% more volatile than the S&P 500.

Analyst Recommendations

This is a summary of recent recommendations for ACRES Commercial Realty and NexPoint Real Estate Finance, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
ACRES Commercial Realty	1	1	2	0	2.25
NexPoint Real Estate Finance	0	4	0	0	2.00

ACRES Commercial Realty presently has a consensus target price of $24.50, indicating a potential upside of 64.44%. NexPoint Real Estate Finance has a consensus target price of $16.75, indicating a potential downside of 3.03%. Given ACRES Commercial Realty’s stronger consensus rating and higher probable upside, equities research analysts clearly believe ACRES Commercial Realty is more favorable than NexPoint Real Estate Finance.

Summary

NexPoint Real Estate Finance beats ACRES Commercial Realty on 11 of the 14 factors compared between the two stocks.

About ACRES Commercial Realty

ACRES Commercial Realty Corp., a real estate investment trust (REIT), focuses on the origination, holding, and management of commercial real estate mortgage loans and equity investments in commercial real estate property in the United States. It invests in commercial real estate-related assets, including floating-rate first mortgage loans, first priority interests in first mortgage loans, subordinated interests in first mortgage loans, mezzanine financing, preferred equity investments, and commercial mortgage-backed securities. 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. The company was formerly known as Exantas Capital Corp. and changed its name to ACRES Commercial Realty Corp. in February 2021. ACRES Commercial Realty Corp. was incorporated in 2005 and is based in Uniondale, 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.