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

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

Earnings & Valuation

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
BRT Apartments	$95.17 million	3.48	$3.87 million	($0.53)	-33.26
NexPoint Residential Trust	$264.80 million	4.06	$44.26 million	$1.75	24.19

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.

Analyst Recommendations

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

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
BRT Apartments	0	0	2	0	3.00
NexPoint Residential Trust	0	2	3	0	2.60

BRT Apartments currently has a consensus target price of $23.00, indicating a potential upside of 30.46%. NexPoint Residential Trust has a consensus target price of $49.00, indicating a potential upside of 15.73%. Given BRT Apartments’ stronger consensus rating and higher possible upside, analysts plainly believe BRT Apartments is more favorable than NexPoint Residential Trust.

Insider and Institutional Ownership

29.1% of BRT Apartments shares are owned by institutional investors. Comparatively, 76.6% of NexPoint Residential Trust shares are owned by institutional investors. 40.2% of BRT Apartments shares are owned by insiders. Comparatively, 13.0% of NexPoint Residential Trust shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Profitability

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

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

Dividends

BRT Apartments pays an annual dividend of $1.00 per share and has a dividend yield of 5.7%. NexPoint Residential Trust pays an annual dividend of $2.04 per share and has a dividend yield of 4.8%. BRT Apartments pays out -188.7% of its earnings in the form of a dividend. NexPoint Residential Trust pays out 116.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. BRT Apartments is clearly the better dividend stock, given its higher yield and lower payout ratio.

Volatility & Risk

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

Summary

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

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.

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.