Independence Realty Trust (NYSE:IRT) versus NexPoint Residential Trust (NYSE:NXRT) Head-To-Head Contrast
by Kim Johansen · The Markets DailyNexPoint Residential Trust (NYSE:NXRT – Get Free Report) and Independence Realty Trust (NYSE:IRT – Get Free Report) are both real estate companies, but which is the superior stock? We will contrast the two businesses based on the strength of their profitability, analyst recommendations, institutional ownership, risk, valuation, earnings and dividends.
Insider & Institutional Ownership
76.6% of NexPoint Residential Trust shares are held by institutional investors. Comparatively, 88.2% of Independence Realty Trust shares are held by institutional investors. 16.6% of NexPoint Residential Trust shares are held by insiders. Comparatively, 0.7% of Independence Realty Trust shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.
Earnings & Valuation
This table compares NexPoint Residential Trust and Independence Realty Trust”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 | 1.66 | -$32.03 million | ($1.47) | -11.08 |
| Independence Realty Trust | $657.70 million | 5.37 | $56.56 million | $0.26 | 57.67 |
Independence Realty Trust has higher revenue and earnings than NexPoint Residential Trust. NexPoint Residential Trust is trading at a lower price-to-earnings ratio than Independence Realty Trust, indicating that it is currently the more affordable of the two stocks.
Analyst Recommendations
This is a summary of current ratings and price targets for NexPoint Residential Trust and Independence Realty Trust, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| NexPoint Residential Trust | 3 | 3 | 0 | 0 | 1.50 |
| Independence Realty Trust | 0 | 4 | 8 | 1 | 2.77 |
NexPoint Residential Trust currently has a consensus price target of $20.50, indicating a potential upside of 25.87%. Independence Realty Trust has a consensus price target of $19.39, indicating a potential upside of 29.30%. Given Independence Realty Trust’s stronger consensus rating and higher possible upside, analysts clearly believe Independence Realty Trust is more favorable than NexPoint Residential Trust.
Profitability
This table compares NexPoint Residential Trust and Independence Realty Trust’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| NexPoint Residential Trust | -13.22% | -11.75% | -1.79% |
| Independence Realty Trust | 9.19% | 1.75% | 1.02% |
Dividends
NexPoint Residential Trust pays an annual dividend of $2.12 per share and has a dividend yield of 13.0%. Independence Realty Trust pays an annual dividend of $0.72 per share and has a dividend yield of 4.8%. NexPoint Residential Trust pays out -144.2% of its earnings in the form of a dividend. Independence Realty Trust pays out 276.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. NexPoint Residential Trust has raised its dividend for 3 consecutive years and Independence Realty Trust has raised its dividend for 3 consecutive years. NexPoint Residential Trust is clearly the better dividend stock, given its higher yield and lower payout ratio.
Risk & Volatility
NexPoint Residential Trust has a beta of 1.15, meaning that its stock price is 15% more volatile than the S&P 500. Comparatively, Independence Realty Trust has a beta of 0.9, meaning that its stock price is 10% less volatile than the S&P 500.
Summary
Independence Realty Trust beats NexPoint Residential Trust on 13 of the 17 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 Independence Realty Trust
Independence Realty Trust, Inc. (NYSE: IRT) is a real estate investment trust that owns and operates multifamily communities, across non-gateway U.S. markets including Atlanta, GA, Dallas, TX, Denver, CO, Columbus, OH, Indianapolis, IN, Raleigh-Durham, NC, Oklahoma City, OK, Nashville, TN, Houston, TX, and Tampa, FL. IRT’s investment strategy is focused on gaining scale near major employment centers within key amenity rich submarkets that offer good school districts and high-quality retail. IRT aims to provide stockholders attractive risk-adjusted returns through diligent portfolio management, strong operational performance, and a consistent return on capital through distributions and capital appreciation.