Education Realty Trust (NYSE: EDR) and NexPoint Residential Trust (NYSE:NXRT) are both finance companies, but which is the superior stock? We will contrast the two companies based on the strength of their profitability, valuation, risk, dividends, institutional ownership, analyst recommendations and earnings.
Education Realty Trust pays an annual dividend of $1.56 per share and has a dividend yield of 5.0%. NexPoint Residential Trust pays an annual dividend of $1.00 per share and has a dividend yield of 4.1%. Education Realty Trust pays out 339.1% 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 37.2% of its earnings in the form of a dividend. Education Realty Trust has raised its dividend for 2 consecutive years and NexPoint Residential Trust has raised its dividend for 7 consecutive years.
This table compares Education Realty Trust and NexPoint Residential Trust’s revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Education Realty Trust||$288.97 million||8.14||$44.92 million||$0.46||67.48|
|NexPoint Residential Trust||$132.85 million||3.90||$21.88 million||$2.69||9.15|
Education Realty Trust has higher revenue and earnings than NexPoint Residential Trust. NexPoint Residential Trust is trading at a lower price-to-earnings ratio than Education Realty Trust, indicating that it is currently the more affordable of the two stocks.
This table compares Education Realty Trust and NexPoint Residential Trust’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Education Realty Trust||11.33%||2.01%||1.32%|
|NexPoint Residential Trust||40.80%||24.54%||5.43%|
Institutional and Insider Ownership
56.3% of NexPoint Residential Trust shares are owned by institutional investors. 0.5% of Education Realty Trust shares are owned by insiders. Comparatively, 19.0% of NexPoint Residential Trust shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.
Risk & Volatility
Education Realty Trust has a beta of 0.38, suggesting that its share price is 62% less volatile than the S&P 500. Comparatively, NexPoint Residential Trust has a beta of 0.72, suggesting that its share price is 28% less volatile than the S&P 500.
This is a summary of recent ratings and price targets for Education Realty Trust and NexPoint Residential Trust, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Education Realty Trust||2||5||6||0||2.31|
|NexPoint Residential Trust||0||1||4||0||2.80|
Education Realty Trust presently has a consensus target price of $40.90, suggesting a potential upside of 31.77%. NexPoint Residential Trust has a consensus target price of $27.67, suggesting a potential upside of 12.37%. Given Education Realty Trust’s higher possible upside, equities analysts clearly believe Education Realty Trust is more favorable than NexPoint Residential Trust.
NexPoint Residential Trust beats Education Realty Trust on 10 of the 17 factors compared between the two stocks.
About Education Realty Trust
Education Realty Trust, Inc. (EdR) is a self-managed and self-advised real estate investment trust (REIT). The Trust is engaged in developing, acquiring, owning and managing collegiate housing communities located near university campuses. The Trust operates through three segments: collegiate housing leasing, development consulting services and management services. The Trust develops collegiate housing communities for its own account and also provides third-party development consulting services on collegiate housing development projects for universities and other third parties. As of December 31, 2016, the Trust owned 64 collegiate housing communities located in 22 states containing 32,729 beds in 12,294 apartment units on or near 38 university campuses. As of December 31, 2016, the Trust provided third-party management services for 22 collegiate housing communities located in 11 states containing 11,767 beds in 4,214 apartment units on or near 17 university campuses.
About NexPoint Residential Trust
NexPoint Residential Trust, Inc. is an externally managed real estate investment trust (REIT). The Company’s investment objectives are to maximize the cash flow and value of properties owned, acquire properties with cash flow growth potential, provide quarterly cash distributions and achieve long-term capital appreciation for its stockholders through targeted management and a value-add program. The Company is focused on multifamily investments primarily located in the Southeastern and Southwestern United States. All of the Company’s business operations are conducted through NexPoint Residential Trust Operating Partnership, L.P. (OP). The sole limited partner of the OP is the Company. Its subsidiary, NexPoint Residential Trust Operating Partnership GP, LLC, is the sole general partner of the OP. As of December 31, 2016, the Company owned 39 properties representing 12,965 units in eight states, including two Parked Assets. The Company’s advisor is NexPoint Real Estate Advisors, L.P.
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