Head-To-Head Analysis: Gadsden Properties (OTCMKTS:GADS) versus NexPoint Residential Trust (NYSE:NXRT)

Gadsden Properties (OTCMKTS:GADS) and NexPoint Residential Trust (NYSE:NXRT) are both finance companies, but which is the better stock? We will contrast the two companies based on the strength of their dividends, profitability, earnings, valuation, analyst recommendations, risk and institutional ownership.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Gadsden Properties	N/A	N/A	N/A
NexPoint Residential Trust	-19.55%	-12.54%	-2.62%

Volatility & Risk

Gadsden Properties has a beta of -7.28, indicating that its share price is 828% less volatile than the S&P 500. Comparatively, NexPoint Residential Trust has a beta of 1.04, indicating that its share price is 4% more volatile than the S&P 500.

Institutional and Insider Ownership

76.6% of NexPoint Residential Trust shares are held by institutional investors. 5.0% of Gadsden Properties shares are held by company insiders. Comparatively, 15.4% of NexPoint Residential Trust shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Earnings and Valuation

This table compares Gadsden Properties and NexPoint Residential Trust”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Gadsden Properties	N/A	N/A	N/A	N/A	N/A
NexPoint Residential Trust	$259.70 million	3.01	$1.11 million	($1.96)	-15.73

NexPoint Residential Trust has higher revenue and earnings than Gadsden Properties.

Analyst Ratings

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

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Gadsden Properties	0	0	0	0	0.00
NexPoint Residential Trust	0	7	0	0	2.00

NexPoint Residential Trust has a consensus target price of $42.30, suggesting a potential upside of 37.16%. Given NexPoint Residential Trust’s stronger consensus rating and higher probable upside, analysts clearly believe NexPoint Residential Trust is more favorable than Gadsden Properties.

Summary

NexPoint Residential Trust beats Gadsden Properties on 6 of the 9 factors compared between the two stocks.

About Gadsden Properties

Gadsden Properties, Inc. is a Nevada corporation that was formed on December 28, 2010. Gadsden concentrates primarily on investments in high quality income-producing assets, residential developments and other opportunistic commercial properties in secondary and tertiary markets across the United States. The Company derives value from smaller, flexible retail investments that range from $5 million to $50 million and off-market mixed-use properties ranging from $50 million to $250 million. As a result of this chosen strategy, we believe that Gadsden is developing a unique competitive advantage that generally allows the Company to invest in markets and assets that are often overlooked by larger institutional investors, such as publicly-traded REITs and other large institutional investors. As part of its strategy, Gadsden attracts specific sellers that prefer the tax deferral advantages offered through issuing operating partnership units in exchange for their properties. These real estate assets are typically operated by independent owners that are seeking to monetize their real estate holdings, and who are typically not well capitalized or well-seasoned real estate operators. These transactions create a variety of outcomes for Gadsden and the sellers typically resulting in lease-up and value-added opportunities that may not be otherwise achieved.

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.