American Campus Communities (ACC) versus NexPoint Residential Trust (NXRT) Financial Contrast

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

Dividends

American Campus Communities pays an annual dividend of $1.76 per share and has a dividend yield of 4.9%. NexPoint Residential Trust pays an annual dividend of $1.00 per share and has a dividend yield of 4.3%. American Campus Communities pays out 429.3% 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 Residential Trust pays out 40.3% of its earnings in the form of a dividend. American Campus Communities has increased its dividend for 5 consecutive years and NexPoint Residential Trust has increased its dividend for 2 consecutive years. American Campus Communities is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Volatility and Risk

American Campus Communities has a beta of 0.2, suggesting that its stock price is 80% less volatile than the S&P 500. Comparatively, NexPoint Residential Trust has a beta of 0.72, suggesting that its stock price is 28% less volatile than the S&P 500.

Insider and Institutional Ownership

56.3% of NexPoint Residential Trust shares are held by institutional investors. 0.7% of American Campus Communities shares are held by insiders. Comparatively, 19.0% of NexPoint Residential Trust shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Valuation & Earnings

This table compares American Campus Communities and NexPoint Residential Trust’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
American Campus Communities $786.36 million 6.23 $99.06 million $0.41 87.51
NexPoint Residential Trust $144.24 million 3.40 $53.37 million $2.48 9.44

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

Analyst Ratings

This is a summary of current ratings and recommmendations for American Campus Communities and NexPoint Residential Trust, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
American Campus Communities 1 4 9 0 2.57
NexPoint Residential Trust 0 1 4 0 2.80

American Campus Communities presently has a consensus target price of $49.50, suggesting a potential upside of 37.96%. NexPoint Residential Trust has a consensus target price of $27.67, suggesting a potential upside of 18.18%. Given American Campus Communities’ higher probable upside, equities research analysts plainly believe American Campus Communities is more favorable than NexPoint Residential Trust.

Profitability

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

Net Margins Return on Equity Return on Assets
American Campus Communities 7.16% 1.58% 0.89%
NexPoint Residential Trust 37.00% 23.02% 4.98%

Summary

NexPoint Residential Trust beats American Campus Communities on 9 of the 17 factors compared between the two stocks.

American Campus Communities Company Profile

American Campus Communities, Inc. is a self-managed and self-administered equity real estate investment trust (REIT). The Company’s segments include Wholly-Owned Properties, On-Campus Participating Properties, Development Services, and Property Management Services. It is engaged in the acquisition, design, financing, development, construction management, leasing and management of student housing properties. The Wholly-Owned Properties segment consists of off-campus properties, which are located in close proximity to the school campus. The On-Campus Participating Properties segment includes on-campus properties that are operated under long-term ground/facility leases with three university systems. The Development Services segment consists of development and construction management services that it provides through one of its taxable REIT subsidiaries for third-party owners. The Property Management Services segment includes revenues generated from third-party management contracts.

NexPoint Residential Trust Company Profile

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.

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

Leave a Reply