Contrasting NexPoint Residential Trust (NXRT) & United Dominion Realty Trust (UDR)
NexPoint Residential Trust (NYSE: NXRT) and United Dominion Realty Trust (NYSE:UDR) are both finance companies, but which is the superior stock? We will contrast the two businesses based on the strength of their institutional ownership, risk, valuation, dividends, analyst recommendations, profitability and earnings.
This is a summary of recent ratings and price targets for NexPoint Residential Trust and United Dominion Realty Trust, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|NexPoint Residential Trust||0||1||4||0||2.80|
|United Dominion Realty Trust||2||10||3||0||2.07|
NexPoint Residential Trust presently has a consensus target price of $27.67, suggesting a potential downside of 3.90%. United Dominion Realty Trust has a consensus target price of $39.75, suggesting a potential upside of 0.99%. Given United Dominion Realty Trust’s higher possible upside, analysts plainly believe United Dominion Realty Trust is more favorable than NexPoint Residential Trust.
Valuation and Earnings
This table compares NexPoint Residential Trust and United Dominion Realty Trust’s revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|NexPoint Residential Trust||$132.85 million||4.56||$21.88 million||$2.69||10.70|
|United Dominion Realty Trust||$959.86 million||10.98||$292.71 million||$1.06||37.13|
United Dominion Realty Trust has higher revenue and earnings than NexPoint Residential Trust. NexPoint Residential Trust is trading at a lower price-to-earnings ratio than United Dominion Realty Trust, indicating that it is currently the more affordable of the two stocks.
Institutional and Insider Ownership
56.6% of NexPoint Residential Trust shares are held by institutional investors. Comparatively, 96.6% of United Dominion Realty Trust shares are held by institutional investors. 19.0% of NexPoint Residential Trust shares are held by company insiders. Comparatively, 3.1% of United Dominion Realty Trust shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.
NexPoint Residential Trust pays an annual dividend of $0.88 per share and has a dividend yield of 3.1%. United Dominion Realty Trust pays an annual dividend of $1.24 per share and has a dividend yield of 3.2%. NexPoint Residential Trust pays out 32.7% of its earnings in the form of a dividend. United Dominion Realty Trust pays out 117.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. United Dominion Realty Trust has increased its dividend for 7 consecutive years. United Dominion Realty Trust is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Risk and Volatility
NexPoint Residential Trust has a beta of 0.81, suggesting that its share price is 19% less volatile than the S&P 500. Comparatively, United Dominion Realty Trust has a beta of 0.4, suggesting that its share price is 60% less volatile than the S&P 500.
This table compares NexPoint Residential Trust and United Dominion Realty Trust’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|NexPoint Residential Trust||40.80%||24.54%||5.43%|
|United Dominion Realty Trust||29.41%||10.18%||3.85%|
NexPoint Residential Trust beats United Dominion Realty Trust on 9 of the 17 factors compared between the two stocks.
NexPoint Residential Trust Company Profile
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.
United Dominion Realty Trust Company Profile
UDR, Inc. is a self-administered real estate investment trust. The Company owns, operates, acquires, renovates, develops, redevelops, disposes of and manages multifamily apartment communities generally located in various markets across the United States. The Company’s segments are Same-Store Communities and Non-Mature Communities/Other. As of December 31, 2016, the Company’s consolidated real estate portfolio included 127 communities located in 18 markets, with a total of 39,454 completed apartment homes. As of December 31, 2016, the Company also had an ownership interest in 27 communities containing 6,849 apartment homes through unconsolidated joint ventures or partnerships. As of December 31, 2016, the Company’s properties were in various locations, such as Orange County, San Francisco and Los Angeles in California; Seattle, Washington; Richmond, Virginia; Baltimore, Maryland; Orlando and Tampa in Florida; Nashville, Tennessee, and Dallas and Austin in Texas.
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