Critical Review: Highwoods Properties (NYSE:HIW) versus NexPoint Residential Trust (NYSE:NXRT)

NexPoint Residential Trust (NYSE:NXRTGet Free Report) and Highwoods Properties (NYSE:HIWGet Free Report) are both finance companies, but which is the superior investment? We will compare the two companies based on the strength of their valuation, earnings, institutional ownership, analyst recommendations, profitability, dividends and risk.

Earnings & Valuation

This table compares NexPoint Residential Trust and Highwoods Properties’ 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 3.55 $44.26 million $2.83 13.58
Highwoods Properties $834.00 million 3.30 $148.71 million $1.22 21.29

Highwoods Properties has higher revenue and earnings than NexPoint Residential Trust. NexPoint Residential Trust is trading at a lower price-to-earnings ratio than Highwoods Properties, indicating that it is currently the more affordable of the two stocks.

Dividends

NexPoint Residential Trust pays an annual dividend of $1.85 per share and has a dividend yield of 4.8%. Highwoods Properties pays an annual dividend of $2.00 per share and has a dividend yield of 7.7%. NexPoint Residential Trust pays out 65.4% of its earnings in the form of a dividend. Highwoods Properties pays out 163.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Profitability

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

Net Margins Return on Equity Return on Assets
NexPoint Residential Trust 27.02% 14.82% 3.49%
Highwoods Properties 15.78% 5.44% 2.18%

Analyst Ratings

This is a summary of current recommendations and price targets for NexPoint Residential Trust and Highwoods Properties, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
NexPoint Residential Trust 0 4 1 0 2.20
Highwoods Properties 1 5 2 0 2.13

NexPoint Residential Trust currently has a consensus target price of $37.75, suggesting a potential downside of 1.77%. Highwoods Properties has a consensus target price of $24.75, suggesting a potential downside of 4.70%. Given NexPoint Residential Trust’s stronger consensus rating and higher possible upside, equities analysts clearly believe NexPoint Residential Trust is more favorable than Highwoods Properties.

Insider and Institutional Ownership

76.6% of NexPoint Residential Trust shares are owned by institutional investors. Comparatively, 96.3% of Highwoods Properties shares are owned by institutional investors. 13.0% of NexPoint Residential Trust shares are owned by company insiders. Comparatively, 1.8% of Highwoods Properties shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Risk & Volatility

NexPoint Residential Trust has a beta of 1.35, indicating that its share price is 35% more volatile than the S&P 500. Comparatively, Highwoods Properties has a beta of 1.27, indicating that its share price is 27% more volatile than the S&P 500.

Summary

NexPoint Residential Trust beats Highwoods Properties on 10 of the 16 factors compared between the two stocks.

About NexPoint Residential Trust

(Get Free Report)

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 Highwoods Properties

(Get Free Report)

Highwoods Properties, Inc., headquartered in Raleigh, is a publicly-traded (NYSE:HIW), fully-integrated office real estate investment trust (REIT) that owns, develops, acquires, leases and manages properties primarily in the best business districts (BBDs) of Atlanta, Charlotte, Dallas, Nashville, Orlando, Raleigh, Richmond and Tampa. Highwoods is in the work-placemaking business. We believe that by creating environments and experiences where the best and brightest can achieve together what they cannot apart, we can deliver greater value to our customers, their teammates and, in turn, our stakeholders.

Receive News & Ratings for NexPoint Residential Trust Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for NexPoint Residential Trust and related companies with MarketBeat.com's FREE daily email newsletter.