NexPoint Real Estate Finance (NYSE:NREF – Get Free Report) and STAG Industrial (NYSE:STAG – Get Free Report) are both finance companies, but which is the better business? We will contrast the two businesses based on the strength of their risk, institutional ownership, valuation, dividends, analyst recommendations, earnings and profitability.
Dividends
NexPoint Real Estate Finance pays an annual dividend of $2.00 per share and has a dividend yield of 12.6%. STAG Industrial pays an annual dividend of $1.49 per share and has a dividend yield of 4.1%. NexPoint Real Estate Finance pays out 270.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. STAG Industrial pays out 143.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.
Insider and Institutional Ownership
67.8% of NexPoint Real Estate Finance shares are held by institutional investors. Comparatively, 88.7% of STAG Industrial shares are held by institutional investors. 54.0% of NexPoint Real Estate Finance shares are held by company insiders. Comparatively, 1.1% of STAG Industrial shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.
Analyst Ratings
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| NexPoint Real Estate Finance | 0 | 4 | 0 | 0 | 2.00 |
| STAG Industrial | 0 | 4 | 4 | 0 | 2.50 |
NexPoint Real Estate Finance currently has a consensus target price of $15.00, indicating a potential downside of 5.54%. STAG Industrial has a consensus target price of $40.38, indicating a potential upside of 10.37%. Given STAG Industrial’s stronger consensus rating and higher possible upside, analysts clearly believe STAG Industrial is more favorable than NexPoint Real Estate Finance.
Profitability
This table compares NexPoint Real Estate Finance and STAG Industrial’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| NexPoint Real Estate Finance | N/A | 11.39% | 0.58% |
| STAG Industrial | 24.64% | 5.51% | 2.89% |
Valuation & Earnings
This table compares NexPoint Real Estate Finance and STAG Industrial”s top-line revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| NexPoint Real Estate Finance | $24.13 million | 11.49 | $13.98 million | $0.74 | 21.46 |
| STAG Industrial | $767.38 million | 8.89 | $189.22 million | $1.04 | 35.17 |
STAG Industrial has higher revenue and earnings than NexPoint Real Estate Finance. NexPoint Real Estate Finance is trading at a lower price-to-earnings ratio than STAG Industrial, indicating that it is currently the more affordable of the two stocks.
Volatility and Risk
NexPoint Real Estate Finance has a beta of 1.63, meaning that its stock price is 63% more volatile than the S&P 500. Comparatively, STAG Industrial has a beta of 1.09, meaning that its stock price is 9% more volatile than the S&P 500.
Summary
STAG Industrial beats NexPoint Real Estate Finance on 11 of the 16 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 STAG Industrial
STAG Industrial, Inc. is a real estate investment company, which engages in acquiring, owning, and managing single-tenant, industrial real estate assets. It offers industrial real estate operating platform to real estate ownership. The company was founded by Benjamin S. Butcher on July 21, 2010 and is headquartered in Boston, MA.
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