New Senior Investment Group (NYSE: SNR) and NexPoint Residential Trust (NYSE:NXRT) are both small-cap financials companies, but which is the superior investment? We will contrast the two businesses based on the strength of their earnings, risk, analyst recommendations, profitability, valuation, dividends and institutional ownership.
This is a breakdown of recent ratings for New Senior Investment Group and NexPoint Residential Trust, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|New Senior Investment Group||1||2||1||0||2.00|
|NexPoint Residential Trust||0||1||4||0||2.80|
New Senior Investment Group currently has a consensus price target of $9.33, suggesting a potential upside of 31.46%. NexPoint Residential Trust has a consensus price target of $27.67, suggesting a potential upside of 13.11%. Given New Senior Investment Group’s higher probable upside, analysts clearly believe New Senior Investment Group is more favorable than NexPoint Residential Trust.
This table compares New Senior Investment Group and NexPoint Residential Trust’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|New Senior Investment Group||-12.87%||-11.40%||-2.14%|
|NexPoint Residential Trust||40.80%||24.54%||5.43%|
Institutional & Insider Ownership
67.5% of New Senior Investment Group shares are owned by institutional investors. Comparatively, 55.7% of NexPoint Residential Trust shares are owned by institutional investors. 1.0% of New Senior Investment Group shares are owned by company insiders. Comparatively, 19.0% of NexPoint Residential Trust shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.
Valuation & Earnings
This table compares New Senior Investment Group and NexPoint Residential Trust’s revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|New Senior Investment Group||$472.44 million||1.23||-$72.24 million||($0.29)||-24.48|
|NexPoint Residential Trust||$132.85 million||3.88||$21.88 million||$2.70||9.06|
NexPoint Residential Trust has lower revenue, but higher earnings than New Senior Investment Group. New Senior Investment Group 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.
New Senior Investment Group pays an annual dividend of $1.04 per share and has a dividend yield of 14.6%. NexPoint Residential Trust pays an annual dividend of $1.00 per share and has a dividend yield of 4.1%. New Senior Investment Group pays out -358.6% of its earnings in the form of a dividend. NexPoint Residential Trust pays out 37.0% 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. New Senior Investment Group has raised its dividend for 2 consecutive years. New Senior Investment Group is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
NexPoint Residential Trust beats New Senior Investment Group on 10 of the 16 factors compared between the two stocks.
About New Senior Investment Group
New Senior Investment Group Inc. is a real estate investment trust with a diversified portfolio of primarily private pay senior housing properties located across the United States. The Company operates through two segments: Managed Properties and Triple Net Lease Properties. As of December 31, 2016, the Company owned a diversified portfolio of 152 primarily private pay senior housing properties located across 37 states. Under its Managed Properties segment, the Company invests in senior housing properties throughout the United States and engages property managers to manage those senior housing properties. As of December 31, 2016, the Company owned 94 properties under property management agreements with the property managers. Under its Triple Net Lease Properties segment, the Company invests in senior housing and healthcare properties throughout the United States, and leases those properties to healthcare operating companies under triple net leases.
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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