NexPoint Residential Trust (NYSE:NXRT) vs. Morguard North American Residential Real Estate Investment Trust (OTCMKTS:MNARF) Financial Analysis

Morguard North American Residential Real Estate Investment Trust (OTCMKTS:MNARF) and NexPoint Residential Trust (NYSE:NXRT) are both real estate companies, but which is the better stock? We will contrast the two companies based on the strength of their risk, dividends, valuation, institutional ownership, profitability, earnings and analyst recommendations.

Profitability

This table compares Morguard North American Residential Real Estate Investment Trust and NexPoint Residential Trust’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Morguard North American Residential Real Estate Investment Trust	N/A	N/A	N/A
NexPoint Residential Trust	-13.22%	-11.75%	-1.79%

Institutional & Insider Ownership

9.6% of Morguard North American Residential Real Estate Investment Trust shares are held by institutional investors. Comparatively, 76.6% of NexPoint Residential Trust shares are held by institutional investors. 16.6% of NexPoint Residential Trust shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Dividends

Morguard North American Residential Real Estate Investment Trust pays an annual dividend of $0.60 per share and has a dividend yield of 5.0%. NexPoint Residential Trust pays an annual dividend of $2.12 per share and has a dividend yield of 8.6%. Morguard North American Residential Real Estate Investment Trust pays out 43.2% of its earnings in the form of a dividend. NexPoint Residential Trust pays out -159.4% 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. NexPoint Residential Trust has raised its dividend for 3 consecutive years. NexPoint Residential Trust is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Ratings

This is a breakdown of recent ratings and recommmendations for Morguard North American Residential Real Estate Investment Trust and NexPoint Residential Trust, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Morguard North American Residential Real Estate Investment Trust	0	1	1	0	2.50
NexPoint Residential Trust	2	2	0	1	2.00

NexPoint Residential Trust has a consensus target price of $22.00, indicating a potential downside of 10.48%. Given NexPoint Residential Trust’s higher possible upside, analysts plainly believe NexPoint Residential Trust is more favorable than Morguard North American Residential Real Estate Investment Trust.

Earnings and Valuation

This table compares Morguard North American Residential Real Estate Investment Trust 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
Morguard North American Residential Real Estate Investment Trust	N/A	N/A	N/A	$1.39	8.70
NexPoint Residential Trust	$251.28 million	2.50	-$32.03 million	($1.33)	-18.48

Morguard North American Residential Real Estate Investment Trust has higher earnings, but lower revenue than NexPoint Residential Trust. NexPoint Residential Trust is trading at a lower price-to-earnings ratio than Morguard North American Residential Real Estate Investment Trust, indicating that it is currently the more affordable of the two stocks.

Summary

NexPoint Residential Trust beats Morguard North American Residential Real Estate Investment Trust on 8 of the 15 factors compared between the two stocks.

About Morguard North American Residential Real Estate Investment Trust

The REIT is an unincorporated, open-ended real estate investment trust established under and governed by the laws of the Province of Ontario. The Units of the REIT trade on the Toronto Stock Exchange under the ticker symbol MRG.UN. With a strategic focus on the acquisition of high-quality multi-suite residential properties in Canada and the United States, the REIT maximizes long-term Unit value through active asset and property management. The REIT’s portfolio is comprised of 13,089 residential suites and 229,500 square feet of commercial area (as of October 24, 2023) located in Alberta, Ontario, Colorado, Texas, Louisiana, Illinois, Georgia, Florida, North Carolina, Virginia and Maryland with an appraised value of approximately $4.0 billion at September 30, 2023.

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.