NexPoint Real Estate Finance (NYSE:NREF – Get Free Report) and Claros Mortgage Trust (NYSE:CMTG – Get Free Report) are both small-cap finance companies, but which is the better investment? We will contrast the two companies based on the strength of their dividends, institutional ownership, earnings, analyst recommendations, valuation, profitability and risk.
Risk & Volatility
NexPoint Real Estate Finance has a beta of 1.11, indicating that its share price is 11% more volatile than the S&P 500. Comparatively, Claros Mortgage Trust has a beta of 1.16, indicating that its share price is 16% more volatile than the S&P 500.
Institutional and Insider Ownership
67.8% of NexPoint Real Estate Finance shares are held by institutional investors. Comparatively, 89.5% of Claros Mortgage Trust shares are held by institutional investors. 59.9% of NexPoint Real Estate Finance shares are held by insiders. Comparatively, 2.6% of Claros Mortgage 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.
Profitability
| Net Margins | Return on Equity | Return on Assets | |
| NexPoint Real Estate Finance | 107.93% | 12.72% | 0.92% |
| Claros Mortgage Trust | -354.13% | -19.70% | -6.52% |
Analyst Ratings
This is a summary of recent ratings and target prices for NexPoint Real Estate Finance and Claros Mortgage Trust, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| NexPoint Real Estate Finance | 1 | 3 | 0 | 0 | 1.75 |
| Claros Mortgage Trust | 3 | 1 | 0 | 0 | 1.25 |
NexPoint Real Estate Finance currently has a consensus price target of $16.75, indicating a potential downside of 4.23%. Claros Mortgage Trust has a consensus price target of $2.22, indicating a potential upside of 29.25%. Given Claros Mortgage Trust’s higher possible upside, analysts clearly believe Claros Mortgage Trust is more favorable than NexPoint Real Estate Finance.
Earnings & Valuation
This table compares NexPoint Real Estate Finance and Claros Mortgage Trust”s gross revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| NexPoint Real Estate Finance | $89.95 million | 3.67 | $105.10 million | $2.37 | 7.38 |
| Claros Mortgage Trust | $187.83 million | 1.29 | -$489.07 million | ($3.83) | -0.45 |
NexPoint Real Estate Finance has higher earnings, but lower revenue than Claros Mortgage Trust. Claros Mortgage Trust 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.
Summary
NexPoint Real Estate Finance beats Claros Mortgage Trust on 9 of the 13 factors compared between the two stocks.
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.
About Claros Mortgage Trust
Claros Mortgage Trust, Inc. operates as a real estate investment trust. It focuses on originating senior and subordinate loans on transitional commercial real estate assets in the United States. The company has elected to be taxed as a real estate investment trust. As a result, it would not be subject to corporate income tax on that portion of its net income that is distributed to shareholders. The company was incorporated in 2015 and is headquartered in New York, New York.
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