NYSE:NREF

Stock Analysis Report

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Executive Summary

NexPoint Real Estate Finance, Inc. operates as a commercial real estate finance company in the United States. More Details


Snowflake Analysis

High growth potential and slightly overvalued.

Share Price & News

How has NexPoint Real Estate Finance's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: NREF is not significantly more volatile than the rest of US stocks over the past 3 months, typically moving +/- 6% a week.

Volatility Over Time: NREF's weekly volatility has decreased from 13% to 6% over the past year.


Market Performance


7 Day Return

11.9%

NREF

5.4%

US Mortgage REITs

2.1%

US Market


1 Year Return

n/a

NREF

-27.2%

US Mortgage REITs

19.8%

US Market

Return vs Industry: Insufficient data to determine how NREF performed against the US Mortgage REITs industry.

Return vs Market: Insufficient data to determine how NREF performed against the US Market.


Shareholder returns

NREFIndustryMarket
7 Day11.9%5.4%2.1%
30 Day19.3%20.5%8.1%
90 Day7.5%15.6%6.0%
1 Yearn/a-19.2%-27.2%22.5%19.8%
3 Yearn/a-3.8%-29.9%46.5%36.8%
5 Yearn/a41.8%-18.2%96.9%75.3%

Long-Term Price Volatility Vs. Market

How volatile is NexPoint Real Estate Finance's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is NexPoint Real Estate Finance undervalued compared to its fair value and its price relative to the market?

47.45x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: NREF ($16.12) is trading above our estimate of fair value ($6.82)

Significantly Below Fair Value: NREF is trading above our estimate of fair value.


Price To Earnings Ratio

PE vs Industry: NREF is poor value based on its PE Ratio (47.4x) compared to the US Mortgage REITs industry average (19x).

PE vs Market: NREF is poor value based on its PE Ratio (47.4x) compared to the US market (19.7x).


Price to Earnings Growth Ratio

PEG Ratio: NREF is good value based on its PEG Ratio (0.6x)


Price to Book Ratio

PB vs Industry: NREF is good value based on its PB Ratio (0.6x) compared to the US Mortgage REITs industry average (0.9x).


Next Steps

Future Growth

How is NexPoint Real Estate Finance forecast to perform in the next 1 to 3 years based on estimates from 3 analysts?

74.1%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: NREF's forecast earnings growth (74.1% per year) is above the savings rate (2.2%).

Earnings vs Market: NREF's earnings (74.1% per year) are forecast to grow faster than the US market (22% per year).

High Growth Earnings: earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: NREF's revenue (41.9% per year) is forecast to grow faster than the US market (10.2% per year).

High Growth Revenue: NREF's revenue (41.9% per year) is forecast to grow faster than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: NREF's Return on Equity is forecast to be low in 3 years time (6.8%).


Next Steps

Past Performance

How has NexPoint Real Estate Finance performed over the past 5 years?

-63.2%

Last years earnings growth


Earnings and Revenue History

Quality Earnings: NREF has high quality earnings.

Growing Profit Margin: NREF's current net profit margins (8.2%) are lower than last year (14.3%).


Past Earnings Growth Analysis

Earnings Trend: Unable to establish if NREF's year-on-year earnings growth rate was positive over the past 5 years as it has been trading publicly for less than 3 years.

Accelerating Growth: Unable to compare NREF's past year earnings growth to its 5-year average as it has been trading publicly for less than 3 years.

Earnings vs Industry: NREF had negative earnings growth (-63.2%) over the past year, making it difficult to compare to the Mortgage REITs industry average (-16.6%).


Return on Equity

High ROE: NREF's Return on Equity (4.9%) is considered low.


Next Steps

Financial Health

How is NexPoint Real Estate Finance's financial position?


Financial Position Analysis

Short Term Liabilities: NREF's short term assets ($6.1B) exceed its short term liabilities ($163.7M).

Long Term Liabilities: NREF's short term assets ($6.1B) exceed its long term liabilities ($5.6B).


Debt to Equity History and Analysis

Debt Level: NREF's debt to equity ratio (1484%) is considered high.

Reducing Debt: Insufficient data to determine if NREF's debt to equity ratio has reduced over the past 5 years.

Debt Coverage: Insufficient data to determine if NREF's debt is well covered by operating cash flow.

Interest Coverage: Insufficient data to determine if NREF's interest payments on its debt are well covered by EBIT.


Balance Sheet


Next Steps

Dividend

What is NexPoint Real Estate Finance current dividend yield, its reliability and sustainability?

9.93%

Current Dividend Yield


Upcoming Dividend Payment


Dividend Yield vs Market

Notable Dividend: NREF's dividend (9.93%) is higher than the bottom 25% of dividend payers in the US market (1.47%).

High Dividend: NREF's dividend (9.93%) is in the top 25% of dividend payers in the US market (4.05%)


Stability and Growth of Payments

Stable Dividend: Too early to tell whether NREF's dividend payments have been stable as they only just started paying a dividend.

Growing Dividend: Too early to tell if NREF's dividend payments are increasing as they only just started paying a dividend.


Current Payout to Shareholders

Dividend Coverage: With its high payout ratio (300.2%), NREF's dividend payments are not well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: NREF's dividends in 3 years are not forecast to be well covered by earnings (106.5% payout ratio).


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

0.8yrs

Average management tenure


CEO

Jim Dondero (57 yo)

no data

Tenure

Mr. James David Dondero, also known as Jim, CFA, CMA, CPA, serves as the President at NexPoint Real Estate Advisors VII, L.P. He also serves as President at Nexpoint Insurance Solutions, L.P. Mr. Dondero h...


Leadership Team

NamePositionTenureCompensationOwnership
James Dondero
Chairmanno datano data2.95%
$ 9.0m
Brian Mitts
EVP of Finance1.42yrsno data0.65%
$ 2.0m
Matthew McGraner
Executive VP & Chief Investment Officer0.75yrno data0.58%
$ 1.8m
Dennis Sauter
General Counsel0.58yrno datano data
Matthew Goetz
Senior Vice President of Investments & Asset Management0.75yrno data0.71%
$ 2.2m

0.8yrs

Average Tenure

45yo

Average Age

Experienced Management: NREF's management team is not considered experienced ( 0.8 years average tenure), which suggests a new team.


Board Members

NamePositionTenureCompensationOwnership
James Dondero
Chairmanno datano data2.95%
$ 9.0m
Brian Mitts
EVP of Finance1.42yrsno data0.65%
$ 2.0m
Arthur Laffer
Independent Director0.75yrno data0.78%
$ 2.4m
Scott Farris Kavanaugh
Independent Director0.75yrno datano data
Catherine Wood
Independent Director0.33yrno datano data
Edward Constantino
Independent Director0.75yrno data0.31%
$ 938.4k

0.8yrs

Average Tenure

59yo

Average Age

Experienced Board: NREF's board of directors are not considered experienced ( 0.8 years average tenure), which suggests a new board.


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: NREF insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: NREF only recently listed within the past 12 months.


Top Shareholders

Company Information

NexPoint Real Estate Finance, Inc.'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: NexPoint Real Estate Finance, Inc.
  • Ticker: NREF
  • Exchange: NYSE
  • Founded: 2019
  • Industry: Mortgage REITs
  • Sector: Diversified Financials
  • Implied Market Cap: US$304.676m
  • Market Cap: US$82.428m
  • Shares outstanding: 18.90m
  • Website: https://www.nexpointfinance.com

Location

  • NexPoint Real Estate Finance, Inc.
  • 300 Crescent Court
  • Suite 700
  • Dallas
  • Texas
  • 75201
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
NREFNYSE (New York Stock Exchange)YesCommon StockUSUSDFeb 2020
NREF.PRANYSE (New York Stock Exchange)8.50% RED PFD AUSUSDJul 2020

Biography

NexPoint Real Estate Finance, Inc. operates as a commercial real estate finance company in the United States. It focuses on originating, structuring, and investing in first mortgage loans, mezzanine loans,...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/11/27 01:05
End of Day Share Price2020/11/25 00:00
Earnings2020/09/30
Annual Earnings2019/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.