Financial Comparison: NexPoint Residential Trust (NYSE:NXRT) & Elme Communities (NYSE:ELME)

NexPoint Residential Trust (NYSE:NXRT) and Elme Communities (NYSE:ELME) are both small-cap finance companies, but which is the better business? We will compare the two companies based on the strength of their valuation, earnings, institutional ownership, profitability, dividends, risk and analyst recommendations.

Insider & Institutional Ownership

76.6% of NexPoint Residential Trust shares are owned by institutional investors. Comparatively, 87.9% of Elme Communities shares are owned by institutional investors. 15.4% of NexPoint Residential Trust shares are owned by insiders. Comparatively, 1.4% of Elme Communities shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Earnings & Valuation

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
NexPoint Residential Trust	$251.28 million	2.49	-$32.03 million	($1.27)	-19.39
Elme Communities	$206.36 million	0.87	-$154.16 million	($1.52)	-1.33

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

Analyst Ratings

This is a summary of recent ratings and recommmendations for NexPoint Residential Trust and Elme Communities, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
NexPoint Residential Trust	2	5	0	0	1.71
Elme Communities	1	2	0	0	1.67

NexPoint Residential Trust presently has a consensus price target of $34.75, indicating a potential upside of 41.13%. Elme Communities has a consensus price target of $18.00, indicating a potential upside of 788.89%. Given Elme Communities’ higher probable upside, analysts clearly believe Elme Communities is more favorable than NexPoint Residential Trust.

Dividends

NexPoint Residential Trust pays an annual dividend of $2.12 per share and has a dividend yield of 8.6%. Elme Communities pays an annual dividend of $0.36 per share and has a dividend yield of 17.8%. NexPoint Residential Trust pays out -166.9% of its earnings in the form of a dividend. Elme Communities pays out -23.7% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. NexPoint Residential Trust has increased its dividend for 3 consecutive years.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
NexPoint Residential Trust	-12.74%	-9.52%	-1.72%
Elme Communities	-74.71%	-20.43%	-8.29%

Risk and Volatility

NexPoint Residential Trust has a beta of 1.19, suggesting that its stock price is 19% more volatile than the S&P 500. Comparatively, Elme Communities has a beta of 0.69, suggesting that its stock price is 31% less volatile than the S&P 500.

Summary

NexPoint Residential Trust beats Elme Communities on 12 of the 16 factors compared between the two stocks.

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.

About Elme Communities

Elme Communities is committed to elevating what home can be for middle-income renters by providing a higher level of quality, service, and experience. The Company is a multifamily real estate investment trust that owns and operates approximately 9,400 apartment homes in the Washington, DC metro and the Atlanta metro regions, and owns approximately 300,000 square feet of commercial space. Focused on providing quality, affordable homes to a deep, solid, and underserved base of mid-market demand, Elme Communities is building long-term value for shareholders.