NexPoint Real Estate Finance (NYSE:NREF – Get Free Report) and CTO Realty Growth (NYSE:CTO – Get Free Report) are both small-cap finance companies, but which is the superior investment? We will compare the two businesses based on the strength of their dividends, risk, analyst recommendations, earnings, valuation, profitability and institutional ownership.
Dividends
NexPoint Real Estate Finance pays an annual dividend of $2.00 per share and has a dividend yield of 15.1%. CTO Realty Growth pays an annual dividend of $1.52 per share and has a dividend yield of 8.7%. NexPoint Real Estate Finance pays out 307.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. CTO Realty Growth pays out 5,066.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. CTO Realty Growth has increased its dividend for 2 consecutive years. NexPoint Real Estate Finance is clearly the better dividend stock, given its higher yield and lower payout ratio.
Valuation & Earnings
This table compares NexPoint Real Estate Finance and CTO Realty Growth’s gross revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| NexPoint Real Estate Finance | $68.36 million | 3.40 | $13.98 million | $0.65 | 20.35 |
| CTO Realty Growth | $109.12 million | 3.68 | $5.53 million | $0.03 | 582.67 |
Analyst Recommendations
This is a breakdown of current ratings and recommmendations for NexPoint Real Estate Finance and CTO Realty Growth, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| NexPoint Real Estate Finance | 0 | 1 | 0 | 1 | 3.00 |
| CTO Realty Growth | 0 | 0 | 4 | 0 | 3.00 |
NexPoint Real Estate Finance currently has a consensus target price of $16.50, suggesting a potential upside of 24.72%. CTO Realty Growth has a consensus target price of $20.00, suggesting a potential upside of 14.42%. Given NexPoint Real Estate Finance’s higher possible upside, equities research analysts clearly believe NexPoint Real Estate Finance is more favorable than CTO Realty Growth.
Insider and Institutional Ownership
67.8% of NexPoint Real Estate Finance shares are held by institutional investors. Comparatively, 67.2% of CTO Realty Growth shares are held by institutional investors. 54.0% of NexPoint Real Estate Finance shares are held by company insiders. Comparatively, 5.0% of CTO Realty Growth shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.
Risk & Volatility
NexPoint Real Estate Finance has a beta of 1.61, suggesting that its stock price is 61% more volatile than the S&P 500. Comparatively, CTO Realty Growth has a beta of 0.74, suggesting that its stock price is 26% less volatile than the S&P 500.
Profitability
This table compares NexPoint Real Estate Finance and CTO Realty Growth’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| NexPoint Real Estate Finance | 23.44% | 9.51% | 0.46% |
| CTO Realty Growth | 5.07% | 1.17% | 0.54% |
Summary
NexPoint Real Estate Finance beats CTO Realty Growth on 11 of the 17 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 CTO Realty Growth
CTO Realty Growth, Inc. is a publicly traded real estate investment trust that owns and operates a portfolio of high-quality, retail-based properties located primarily in higher growth markets in the United States. CTO also externally manages and owns a meaningful interest in Alpine Income Property Trust, Inc. (NYSE: PINE), a publicly traded net lease REIT.
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