Sun Communities (SUI) & NexPoint Residential Trust (NXRT) Head-To-Head Review

Sun Communities (NYSE: SUI) and NexPoint Residential Trust (NASDAQ:NXRT) are both finance companies, but which is the superior business? We will contrast the two companies based on the strength of their earnings, risk, analyst recommendations, dividends, institutional ownership, valuation and profitability.

Earnings & Valuation

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

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Sun Communities $936.86 million 7.48 $443.91 million $0.70 126.74
NexPoint Residential Trust $137.90 million 3.65 $57.99 million N/A N/A

Sun Communities has higher revenue and earnings than NexPoint Residential Trust.

Analyst Ratings

This is a breakdown of recent recommendations for Sun Communities and NexPoint Residential Trust, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Sun Communities 0 2 4 0 2.67
NexPoint Residential Trust 0 1 2 0 2.67

Sun Communities currently has a consensus target price of $91.33, indicating a potential upside of 2.95%. NexPoint Residential Trust has a consensus target price of $28.00, indicating a potential upside of 16.96%. Given NexPoint Residential Trust’s higher possible upside, analysts plainly believe NexPoint Residential Trust is more favorable than Sun Communities.

Institutional and Insider Ownership

94.3% of Sun Communities shares are held by institutional investors. 4.2% of Sun Communities shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Profitability

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

Net Margins Return on Equity Return on Assets
Sun Communities 6.82% 2.59% 1.07%
NexPoint Residential Trust 28.18% 14.15% 3.70%

Dividends

Sun Communities pays an annual dividend of $2.68 per share and has a dividend yield of 3.0%. NexPoint Residential Trust does not pay a dividend. Sun Communities pays out 382.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Summary

Sun Communities beats NexPoint Residential Trust on 7 of the 13 factors compared between the two stocks.

About Sun Communities

Sun Communities, Inc. is a self-administered and self-managed real estate investment trust (REIT). The Company is a fully integrated real estate company, which, together with its affiliates and predecessors, has been in the business of acquiring, operating, developing, and expanding manufactured housing (MH) and recreational vehicle (RV). As of December 31, 2016, it owned and operated or had an interest in a portfolio of properties located throughout the United States and Ontario, Canada, including 226 MH communities, 87 RV communities, and 28 properties containing both MH and RV sites. The Company operates through two segments: Real Property Operations and Home Sales and Rentals. The Real Property Operations segment owns, operates, or has an interest in a portfolio, and develops MH communities and RV communities throughout the United States and is in the business of acquiring, operating, and expanding MH and RV communities.

About NexPoint Residential Trust

NexPoint Residential Trust, Inc. is an externally managed real estate investment trust (REIT). The Company’s investment objectives are to maximize the cash flow and value of properties owned, acquire properties with cash flow growth potential, provide quarterly cash distributions and achieve long-term capital appreciation for its stockholders through targeted management and a value-add program. The Company is focused on multifamily investments primarily located in the Southeastern and Southwestern United States. All of the Company’s business operations are conducted through NexPoint Residential Trust Operating Partnership, L.P. (OP). The sole limited partner of the OP is the Company. Its subsidiary, NexPoint Residential Trust Operating Partnership GP, LLC, is the sole general partner of the OP. As of December 31, 2016, the Company owned 39 properties representing 12,965 units in eight states, including two Parked Assets. The Company’s advisor is NexPoint Real Estate Advisors, L.P.

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