Head to Head Contrast: NexPoint Residential Trust (NYSE:NXRT) & Presidio Property Trust (NASDAQ:SQFT)

NexPoint Residential Trust (NYSE:NXRT) and Presidio Property Trust (NASDAQ:SQFT) are both small-cap finance companies, but which is the superior investment? We will compare the two companies based on the strength of their valuation, profitability, dividends, risk, analyst recommendations, earnings and institutional ownership.

Institutional and Insider Ownership

76.6% of NexPoint Residential Trust shares are held by institutional investors. Comparatively, 38.9% of Presidio Property Trust shares are held by institutional investors. 13.0% of NexPoint Residential Trust shares are held by company insiders. Comparatively, 10.6% of Presidio Property Trust shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Dividends

NexPoint Residential Trust pays an annual dividend of $1.85 per share and has a dividend yield of 5.9%. Presidio Property Trust pays an annual dividend of $0.09 per share and has a dividend yield of 10.3%. NexPoint Residential Trust pays out 110.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Presidio Property Trust pays out 6.3% of its earnings in the form of a dividend. NexPoint Residential Trust has increased its dividend for 8 consecutive years and Presidio Property Trust has increased its dividend for 1 consecutive years. Presidio Property Trust is clearly the better dividend stock, given its higher yield and lower payout ratio.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
NexPoint Residential Trust	15.97%	8.92%	2.04%
Presidio Property Trust	107.48%	-6.80%	-1.79%

Valuation & Earnings

This table compares NexPoint Residential Trust and Presidio Property Trust’s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
NexPoint Residential Trust	$277.53 million	2.91	$44.26 million	$1.68	18.65
Presidio Property Trust	$17.64 million	0.71	-$2.13 million	$1.42	0.61

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

Volatility and Risk

NexPoint Residential Trust has a beta of 1.28, meaning that its stock price is 28% more volatile than the S&P 500. Comparatively, Presidio Property Trust has a beta of 1.56, meaning that its stock price is 56% more volatile than the S&P 500.

Analyst Recommendations

This is a summary of recent recommendations and price targets for NexPoint Residential Trust and Presidio Property Trust, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
NexPoint Residential Trust	1	2	2	0	2.20
Presidio Property Trust	0	0	0	0	N/A

NexPoint Residential Trust currently has a consensus target price of $37.25, indicating a potential upside of 18.86%. Given NexPoint Residential Trust’s higher probable upside, analysts plainly believe NexPoint Residential Trust is more favorable than Presidio Property Trust.

Summary

NexPoint Residential Trust beats Presidio Property Trust 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 Presidio Property Trust

Presidio is an internally managed, diversified REIT with holdings in model home properties which are triple-net leased to homebuilders, office, industrial, and retail properties. Presidio's model homes are leased to homebuilders located in Arizona, Illinois, Texas, Wisconsin, and Florida. Our office, industrial and retail properties are located primarily in Colorado, with properties also located in Maryland, North Dakota, Texas, and Southern California. While geographical clustering of real estate enables us to reduce our operating costs through economies of scale by servicing several properties with less staff, it makes us susceptible to changing market conditions in these discrete geographic areas, including those that have developed as a result of COVID-19. Presidio owns approximately 6.5% of the outstanding common stock of Conduit Pharmaceuticals Inc., a disease agnostic multi-asset clinical-stage disease-agnostic life science company providing an efficient model for compound development.