Head to Head Analysis: Centerspace (NYSE:CSR) versus NexPoint Residential Trust (NYSE:NXRT)

Centerspace (NYSE:CSR) and NexPoint Residential Trust (NYSE:NXRT) are both small-cap finance companies, but which is the superior investment? We will compare the two companies based on the strength of their dividends, earnings, profitability, analyst recommendations, risk, institutional ownership and valuation.

Dividends

Centerspace pays an annual dividend of $3.08 per share and has a dividend yield of 4.8%. NexPoint Residential Trust pays an annual dividend of $2.12 per share and has a dividend yield of 7.0%. Centerspace pays out 172.1% 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 -110.4% of its earnings in the form of a dividend. Centerspace has raised its dividend for 2 consecutive years and 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.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Centerspace	11.14%	3.52%	1.54%
NexPoint Residential Trust	-19.23%	-13.32%	-2.60%

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Centerspace and NexPoint Residential Trust, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Centerspace	0	6	2	0	2.25
NexPoint Residential Trust	1	7	0	0	1.88

Centerspace currently has a consensus target price of $69.86, suggesting a potential upside of 8.54%. NexPoint Residential Trust has a consensus target price of $39.88, suggesting a potential upside of 31.02%. Given NexPoint Residential Trust’s higher possible upside, analysts clearly believe NexPoint Residential Trust is more favorable than Centerspace.

Institutional & Insider Ownership

79.0% of Centerspace shares are held by institutional investors. Comparatively, 76.6% of NexPoint Residential Trust shares are held by institutional investors. 0.4% of Centerspace shares are held by insiders. Comparatively, 15.4% of NexPoint Residential Trust shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Volatility and Risk

Centerspace has a beta of 0.78, suggesting that its stock price is 22% less volatile than the S&P 500. Comparatively, NexPoint Residential Trust has a beta of 1.19, suggesting that its stock price is 19% more volatile than the S&P 500.

Earnings and Valuation

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Centerspace	$260.98 million	4.12	-$10.69 million	$1.79	35.96
NexPoint Residential Trust	$252.99 million	3.05	$1.11 million	($1.92)	-15.85

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

Summary

Centerspace beats NexPoint Residential Trust on 10 of the 17 factors compared between the two stocks.

About Centerspace

Centerspace is an owner and operator of apartment communities committed to providing great homes by focusing on integrity and serving others. Founded in 1970, as of September 30, 2023, Centerspace owned interests in 71 apartment communities consisting of 12,785 apartment homes located in Colorado, Minnesota, Montana, Nebraska, North Dakota, and South Dakota. Centerspace was named a Top Workplace for the fourth consecutive year in 2023 by the Minneapolis Star Tribune.

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.