MFA FINL INC/SH (NYSE:MFA) and NexPoint Residential Trust (NYSE:NXRT) are both finance companies, but which is the superior stock? We will compare the two companies based on the strength of their earnings, valuation, dividends, profitability, institutional ownership, analyst recommendations and risk.
Risk & Volatility
MFA FINL INC/SH has a beta of 0.53, suggesting that its stock price is 47% less volatile than the S&P 500. Comparatively, NexPoint Residential Trust has a beta of 0.39, suggesting that its stock price is 61% less volatile than the S&P 500.
80.1% of MFA FINL INC/SH shares are held by institutional investors. Comparatively, 72.1% of NexPoint Residential Trust shares are held by institutional investors. 0.7% of MFA FINL INC/SH shares are held by insiders. Comparatively, 21.5% of NexPoint Residential Trust shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.
Earnings and Valuation
This table compares MFA FINL INC/SH and NexPoint Residential Trust’s revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|MFA FINL INC/SH||$455.67 million||7.43||$301.80 million||$0.68||11.04|
|NexPoint Residential Trust||$146.60 million||7.59||-$1.60 million||$1.88||24.76|
MFA FINL INC/SH has higher revenue and earnings than NexPoint Residential Trust. MFA FINL INC/SH is trading at a lower price-to-earnings ratio than NexPoint Residential Trust, indicating that it is currently the more affordable of the two stocks.
This table compares MFA FINL INC/SH and NexPoint Residential Trust’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|MFA FINL INC/SH||61.54%||9.39%||2.58%|
|NexPoint Residential Trust||-10.21%||-6.07%||-1.34%|
MFA FINL INC/SH pays an annual dividend of $0.80 per share and has a dividend yield of 10.7%. NexPoint Residential Trust pays an annual dividend of $1.10 per share and has a dividend yield of 2.4%. MFA FINL INC/SH pays out 117.6% 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 58.5% of its earnings in the form of a dividend. NexPoint Residential Trust has raised its dividend for 3 consecutive years.
This is a summary of current recommendations and price targets for MFA FINL INC/SH and NexPoint Residential Trust, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|MFA FINL INC/SH||0||2||1||0||2.33|
|NexPoint Residential Trust||0||1||4||1||3.00|
MFA FINL INC/SH currently has a consensus target price of $7.75, suggesting a potential upside of 3.20%. NexPoint Residential Trust has a consensus target price of $46.50, suggesting a potential downside of 0.09%. Given MFA FINL INC/SH’s higher probable upside, equities analysts plainly believe MFA FINL INC/SH is more favorable than NexPoint Residential Trust.
About MFA FINL INC/SH
MFA Financial, Inc., through its subsidiaries, operates as a real estate investment trust (REIT) in the United States. The company invests in residential mortgage assets, including non-agency mortgage-backed securities (MBS), agency MBS, residential whole loans, credit risk transfer securities, and mortgage servicing rights related assets. Its MBS are secured by hybrid, adjustable-rate, 15-year fixed-rate, and 30-year and longer-term fixed-rate mortgages, as well as mortgages that have interest rates that reset annually or more frequently. The company has elected to be taxed as a REIT and would not be subject to federal corporate income taxes if it distributes at least 90% of its taxable income to its stockholders. MFA Financial, Inc. was incorporated in 1997 and is headquartered in New York, New York.
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 Highland Capital Management, L.P., a leading global alternative asset manager and an SEC-registered investment adviser.
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