Comparing Welltower (NYSE:WELL) & NexPoint Real Estate Finance (NYSE:NREF)

Welltower (NYSE:WELLGet Rating) and NexPoint Real Estate Finance (NYSE:NREFGet Rating) are both finance companies, but which is the better investment? We will contrast the two businesses based on the strength of their dividends, profitability, risk, earnings, analyst recommendations, institutional ownership and valuation.

Analyst Ratings

This is a breakdown of current ratings and recommmendations for Welltower and NexPoint Real Estate Finance, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Welltower 0 3 12 1 2.88
NexPoint Real Estate Finance 0 0 1 1 3.50

Welltower presently has a consensus target price of $97.33, indicating a potential upside of 11.77%. NexPoint Real Estate Finance has a consensus target price of $23.00, indicating a potential downside of 1.92%. Given Welltower’s higher possible upside, analysts plainly believe Welltower is more favorable than NexPoint Real Estate Finance.

Institutional & Insider Ownership

93.8% of Welltower shares are held by institutional investors. Comparatively, 74.3% of NexPoint Real Estate Finance shares are held by institutional investors. 0.1% of Welltower shares are held by company insiders. Comparatively, 48.0% of NexPoint Real Estate Finance shares are held by company 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.

Volatility and Risk

Welltower has a beta of 0.98, suggesting that its share price is 2% less volatile than the S&P 500. Comparatively, NexPoint Real Estate Finance has a beta of 1.57, suggesting that its share price is 57% more volatile than the S&P 500.

Valuation and Earnings

This table compares Welltower and NexPoint Real Estate Finance’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Welltower $4.74 billion 8.34 $336.14 million $0.78 111.64
NexPoint Real Estate Finance $55.83 million 6.13 $43.08 million $3.48 6.74

Welltower has higher revenue and earnings than NexPoint Real Estate Finance. NexPoint Real Estate Finance is trading at a lower price-to-earnings ratio than Welltower, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Welltower and NexPoint Real Estate Finance’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Welltower 7.09% 2.19% 1.15%
NexPoint Real Estate Finance 61.05% 15.94% 0.47%

Dividends

Welltower pays an annual dividend of $2.44 per share and has a dividend yield of 2.8%. NexPoint Real Estate Finance pays an annual dividend of $2.00 per share and has a dividend yield of 8.5%. Welltower pays out 312.8% 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 Real Estate Finance pays out 57.5% of its earnings in the form of a dividend. NexPoint Real Estate Finance has raised its dividend for 2 consecutive years. NexPoint Real Estate Finance is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

NexPoint Real Estate Finance beats Welltower on 9 of the 17 factors compared between the two stocks.

About Welltower (Get Rating)

Welltower Inc. (NYSE:WELL), an S&P 500 company headquartered in Toledo, Ohio, is driving the transformation of health care infrastructure. The Company invests with leading seniors housing operators, post-acute providers and health systems to fund the real estate infrastructure needed to scale innovative care delivery models and improve people's wellness and overall health care experience. Welltower, a real estate investment trust ("REIT"), owns interests in properties concentrated in major, high-growth markets in the United States, Canada and the United Kingdom, consisting of seniors housing and post-acute communities and outpatient medical properties.

About NexPoint Real Estate Finance (Get Rating)

NexPoint Real Estate Finance, Inc. operates as a real estate finance company in the United States. It focuses on originating, structuring, and investing in first mortgage loans, mezzanine loans, preferred equity, and preferred stock, as well as multifamily commercial mortgage backed securities securitizations. The company intends to qualify as a real estate investment trust for U.S. federal income tax purposes. It generally would not be subject to federal corporate income taxes if it distributes at least 90% of its taxable income to its stockholders. The company was incorporated in 2019 and is based in Dallas, Texas.

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