Contrasting NexPoint Residential Trust (NYSE:NXRT) & Independence Realty Trust (NYSE:IRT)

Independence Realty Trust (NYSE:IRT) and NexPoint Residential Trust (NYSE:NXRT) are both real estate companies, but which is the superior stock? We will compare the two companies based on the strength of their dividends, risk, profitability, institutional ownership, earnings, analyst recommendations and valuation.

Institutional & Insider Ownership

88.2% of Independence Realty Trust shares are owned by institutional investors. Comparatively, 76.6% of NexPoint Residential Trust shares are owned by institutional investors. 0.7% of Independence Realty Trust shares are owned by insiders. Comparatively, 16.6% of NexPoint Residential Trust shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Dividends

Independence Realty Trust pays an annual dividend of $0.72 per share and has a dividend yield of 4.9%. NexPoint Residential Trust pays an annual dividend of $2.12 per share and has a dividend yield of 11.8%. Independence Realty Trust pays out 400.0% 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 -159.4% of its earnings in the form of a dividend. Independence Realty Trust has increased its dividend for 3 consecutive years and 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 lower payout ratio.

Valuation & Earnings

This table compares Independence Realty Trust and NexPoint Residential Trust”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Independence Realty Trust	$657.70 million	5.28	$56.56 million	$0.18	81.86
NexPoint Residential Trust	$251.28 million	1.83	-$32.03 million	($1.33)	-13.55

Independence Realty Trust has higher revenue and earnings than NexPoint Residential Trust. NexPoint Residential Trust is trading at a lower price-to-earnings ratio than Independence Realty Trust, indicating that it is currently the more affordable of the two stocks.

Risk and Volatility

Independence Realty Trust has a beta of 0.96, suggesting that its stock price is 4% less volatile than the S&P 500. Comparatively, NexPoint Residential Trust has a beta of 1.18, suggesting that its stock price is 18% more volatile than the S&P 500.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Independence Realty Trust	6.52%	1.22%	0.72%
NexPoint Residential Trust	-13.22%	-11.75%	-1.79%

Analyst Recommendations

This is a breakdown of current recommendations and price targets for Independence Realty Trust and NexPoint Residential Trust, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Independence Realty Trust	0	4	8	1	2.77
NexPoint Residential Trust	3	3	0	0	1.50

Independence Realty Trust presently has a consensus price target of $19.39, suggesting a potential upside of 31.58%. NexPoint Residential Trust has a consensus price target of $20.50, suggesting a potential upside of 13.76%. Given Independence Realty Trust’s stronger consensus rating and higher possible upside, analysts clearly believe Independence Realty Trust is more favorable than NexPoint Residential Trust.

Summary

Independence Realty Trust beats NexPoint Residential Trust on 13 of the 17 factors compared between the two stocks.

About Independence Realty Trust

Independence Realty Trust, Inc. (NYSE: IRT) is a real estate investment trust that owns and operates multifamily communities, across non-gateway U.S. markets including Atlanta, GA, Dallas, TX, Denver, CO, Columbus, OH, Indianapolis, IN, Raleigh-Durham, NC, Oklahoma City, OK, Nashville, TN, Houston, TX, and Tampa, FL. IRT’s investment strategy is focused on gaining scale near major employment centers within key amenity rich submarkets that offer good school districts and high-quality retail. IRT aims to provide stockholders attractive risk-adjusted returns through diligent portfolio management, strong operational performance, and a consistent return on capital through distributions and capital appreciation.

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.