Financial Analysis: NexPoint Real Estate Finance (NYSE:NREF) & Selectis Health (OTCMKTS:GBCS)

NexPoint Real Estate Finance (NYSE:NREF) and Selectis Health (OTCMKTS:GBCS) are both small-cap finance companies, but which is the better investment? We will compare the two companies based on the strength of their earnings, analyst recommendations, institutional ownership, risk, valuation, dividends and profitability.

Insider and Institutional Ownership

67.8% of NexPoint Real Estate Finance shares are held by institutional investors. 54.0% of NexPoint Real Estate Finance shares are held by insiders. Comparatively, 15.2% of Selectis Health shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Profitability

This table compares NexPoint Real Estate Finance and Selectis Health’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
NexPoint Real Estate Finance	N/A	11.39%	0.58%
Selectis Health	-14.37%	N/A	-14.59%

Volatility & Risk

NexPoint Real Estate Finance has a beta of 1.65, suggesting that its stock price is 65% more volatile than the S&P 500. Comparatively, Selectis Health has a beta of -0.29, suggesting that its stock price is 129% less volatile than the S&P 500.

Earnings and Valuation

This table compares NexPoint Real Estate Finance and Selectis Health”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
NexPoint Real Estate Finance	$68.36 million	3.85	$13.98 million	$1.05	14.35
Selectis Health	$36.78 million	0.15	-$3.97 million	($1.79)	-0.98

NexPoint Real Estate Finance has higher revenue and earnings than Selectis Health. Selectis Health is trading at a lower price-to-earnings ratio than NexPoint Real Estate Finance, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a summary of recent recommendations for NexPoint Real Estate Finance and Selectis Health, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
NexPoint Real Estate Finance	0	4	0	0	2.00
Selectis Health	0	0	0	0	0.00

NexPoint Real Estate Finance currently has a consensus price target of $14.75, indicating a potential downside of 2.08%. Given NexPoint Real Estate Finance’s stronger consensus rating and higher probable upside, equities analysts plainly believe NexPoint Real Estate Finance is more favorable than Selectis Health.

Summary

NexPoint Real Estate Finance beats Selectis Health on 13 of the 13 factors compared between the two stocks.

About NexPoint Real Estate Finance

NexPoint Real Estate Finance, Inc. operates as a commercial mortgage real estate investment trust in the United States. It focuses on originating, structuring, and investing in first-lien mortgage loans, mezzanine loans, preferred equity, convertible notes, multifamily properties, and common equity investments, as well as multifamily and single-family rental commercial mortgage-backed securities securitizations, multifamily structured credit risk notes, and mortgage-backed securities or target assets. The company has elected to be taxed as a real estate investment trust (REIT) and would not be subject to federal corporate income taxes if it distributes at least 90% of its taxable income to its stockholders. NexPoint Real Estate Finance, Inc. was incorporated in 2019 and is based in Dallas, Texas.

About Selectis Health

Selectis Health owns and/or operates healthcare facilities in Arkansas, Georgia, Ohio, and Oklahoma, providing a wide array of living services, speech, occupational, physical therapies, social services, and other rehabilitation and healthcare services. Selectis focuses on building strategic relationships with local communities in which its partnership can improve the quality of care for facility residents. With its focused growth strategy, Selectis intends to deepen its American Southcentral and Southeastern market presence to better serve the aging population along a full continuum of care.