Analyzing BRT Apartments (NYSE:BRT) & NexPoint Residential Trust (NYSE:NXRT)

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

Analyst Ratings

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

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
NexPoint Residential Trust	0	3	3	0	2.50
BRT Apartments	0	0	2	0	3.00

NexPoint Residential Trust currently has a consensus target price of $46.83, suggesting a potential upside of 10.27%. BRT Apartments has a consensus target price of $23.00, suggesting a potential upside of 25.89%. Given BRT Apartments’ stronger consensus rating and higher possible upside, analysts clearly believe BRT Apartments is more favorable than NexPoint Residential Trust.

Dividends

NexPoint Residential Trust pays an annual dividend of $1.85 per share and has a dividend yield of 4.4%. BRT Apartments pays an annual dividend of $1.00 per share and has a dividend yield of 5.5%. NexPoint Residential Trust pays out 105.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. BRT Apartments pays out -188.7% of its earnings in the form of a dividend. BRT Apartments is clearly the better dividend stock, given its higher yield and lower payout ratio.

Institutional and Insider Ownership

76.6% of NexPoint Residential Trust shares are owned by institutional investors. Comparatively, 29.1% of BRT Apartments shares are owned by institutional investors. 13.0% of NexPoint Residential Trust shares are owned by company insiders. Comparatively, 40.2% of BRT Apartments shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Volatility and Risk

NexPoint Residential Trust has a beta of 1.4, suggesting that its stock price is 40% more volatile than the S&P 500. Comparatively, BRT Apartments has a beta of 1.11, suggesting that its stock price is 11% more volatile than the S&P 500.

Earnings & Valuation

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
NexPoint Residential Trust	$277.53 million	3.89	$44.26 million	$1.75	24.27
BRT Apartments	$95.17 million	3.61	$3.87 million	($0.53)	-34.47

NexPoint Residential Trust has higher revenue and earnings than BRT Apartments. BRT Apartments 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.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
NexPoint Residential Trust	17.54%	9.54%	2.29%
BRT Apartments	-9.94%	-4.33%	-1.34%

Summary

NexPoint Residential Trust beats BRT Apartments on 11 of the 16 factors compared between the two stocks.

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.

About BRT Apartments

BRT is a real estate investment trust that owns, operates and, to a lesser extent, holds interests in joint ventures that own multi-family properties. As of December 31, 2023, BRT owns or has interests in 28 multi-family properties with 7,707 units in 11 states.