NexPoint Real Estate Finance (NYSE:NREF) - Share price, News & Analysis

NREF fundamental analysis
Snowflake Score
Valuation	3/6
Future Growth	1/6
Past Performance	5/6
Financial Health	2/6
Dividends	4/6

NREF Stock Overview

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

Rewards

Trading at 30.9% below our estimate of its fair value

Earnings are forecast to grow 2.92% per year

Earnings grew by 70.9% over the past year

Risk Analysis

Debt is not well covered by operating cash flow

Unstable dividend track record

Shareholders have been diluted in the past year

NexPoint Real Estate Finance Competitors

Annaly Capital Management

NYSE:NLY

US$9.8b

Starwood Property Trust

NYSE:STWD

US$7.1b

AGNC Investment

NasdaqGS:AGNC

US$6.5b

Blackstone Mortgage Trust

NYSE:BXMT

US$5.1b

Price History & Performance

Summary of all time highs, changes and price drops for NexPoint Real Estate Finance
Historical stock prices
Current Share Price	US$24.08
52 Week High	US$24.33
52 Week Low	US$17.96
Beta	1.59
1 Month Change	3.66%
3 Month Change	21.19%
1 Year Change	22.98%
3 Year Change	n/a
5 Year Change	n/a
Change since IPO	28.08%

Shareholder Returns

	NREF	US Mortgage REITs	US Market
7D	0.3%	-1.8%	-2.5%
1Y	23.0%	-18.7%	-10.4%

Return vs Industry: NREF exceeded the US Mortgage REITs industry which returned -18.7% over the past year.

Return vs Market: NREF exceeded the US Market which returned -10.4% over the past year.

Price Volatility

Is NREF's price volatile compared to industry and market?
NREF volatility
NREF Average Weekly Movement	4.0%
Mortgage REITs Industry Average Movement	4.4%
Market Average Movement	7.8%
10% most volatile stocks in US Market	16.7%
10% least volatile stocks in US Market	2.8%

Stable Share Price: NREF is less volatile than 75% of US stocks over the past 3 months, typically moving +/- 4% a week.

Volatility Over Time: NREF's weekly volatility (4%) has been stable over the past year.

About the Company

Founded	Employees	CEO	Website
2019	1	Jim Dondero	https://www.nexpointfinance.com

NexPoint Real Estate Finance, Inc. operates as a real estate finance company in the United States. It focuses on originating, structuring, and investing in first mortgage loans, mezzanine loans, preferred equity, and preferred stock, as well as multifamily commercial mortgage backed securities securitizations. The company intends to qualify as a real estate investment trust for U.S. federal income tax purposes.

NexPoint Real Estate Finance Fundamentals Summary

How do NexPoint Real Estate Finance's earnings and revenue compare to its market cap?
NREF fundamental statistics
Market Cap	US$523.16m
Earnings (TTM)	US$44.13m
Revenue (TTM)	US$91.25m

11.9x

P/E Ratio

5.7x

P/S Ratio

Is NREF overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
NREF income statement (TTM)
Revenue	US$91.25m
Cost of Revenue	US$4.98m
Gross Profit	US$86.26m
Other Expenses	US$42.13m
Earnings	US$44.13m

Last Reported Earnings

Mar 31, 2022

Next Earnings Date

n/a

Earnings per share (EPS)	2.03
Gross Margin	94.54%
Net Profit Margin	48.36%
Debt/Equity Ratio	1,474.2%

How did NREF perform over the long term?

See historical performance and comparison

Dividends

8.3%

Current Dividend Yield

38%

Payout Ratio

Does NREF pay a reliable dividends?

See NREF dividend history and benchmarks

When do you need to buy NREF by to receive an upcoming dividend?
NexPoint Real Estate Finance dividend dates
Ex Dividend Date	Jun 14 2022
Dividend Pay Date	Jun 30 2022
Days until Ex dividend	28 days
Days until Dividend pay date	44 days

Does NREF pay a reliable dividends?

See NREF dividend history and benchmarks

Valuation

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

Valuation Score

3/6

Valuation Score 3/6

Below Fair Value
Significantly Below Fair Value
PE vs Industry
PE vs Market
PEG Ratio
PB vs Industry

30.9%

Undervalued compared to fair value

Share Price vs. Fair Value

Below Fair Value: NREF ($24.08) is trading below our estimate of fair value ($34.87)

Significantly Below Fair Value: NREF is trading below fair value by more than 20%.

Price To Earnings Ratio

PE vs Industry: NREF's PE Ratio (11.9x) is in line with the US Mortgage REITs industry average.

PE vs Market: NREF is good value based on its PE Ratio (11.9x) compared to the US market (15.5x).

Price to Earnings Growth Ratio

PEG Ratio: NREF is poor value based on its PEG Ratio (4.1x)

Price to Book Ratio

PB vs Industry: NREF is overvalued based on its PB Ratio (1.4x) compared to the US Mortgage REITs industry average (0.8x).

Future Growth

How is NexPoint Real Estate Finance forecast to perform in the next 1 to 3 years based on estimates from 2 analysts?

Future Growth Score

1/6

Future Growth Score 1/6

Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Future ROE

2.9%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: NREF's forecast earnings growth (2.9% per year) is above the savings rate (1.9%).

Earnings vs Market: NREF's earnings (2.9% per year) are forecast to grow slower than the US market (12.6% per year).

High Growth Earnings: NREF's earnings are forecast to grow, but not significantly.

Revenue vs Market: NREF's revenue is expected to decline over the next 3 years (-22.6% per year).

High Growth Revenue: NREF's revenue is forecast to decline over the next 3 years (-22.6% per year).

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: Insufficient data to determine if NREF's Return on Equity is forecast to be high in 3 years time

Past Performance

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

Past Performance Score

5/6

Past Performance Score 5/6

Quality Earnings
Growing Profit Margin
Earnings Trend
Accelerating Growth
Earnings vs Industry
High ROE

67.9%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: NREF has high quality earnings.

Growing Profit Margin: NREF's current net profit margins (48.4%) are higher than last year (27.6%).

Past Earnings Growth Analysis

Earnings Trend: NREF's earnings have grown significantly by 67.9% per year over the past 5 years.

Accelerating Growth: NREF's earnings growth over the past year (70.9%) exceeds its 5-year average (67.9% per year).

Earnings vs Industry: NREF earnings growth over the past year (70.9%) exceeded the Mortgage REITs industry 5.4%.

Return on Equity

High ROE: NREF's Return on Equity (15.2%) is considered low.

Financial Health

How is NexPoint Real Estate Finance's financial position?

Financial Health Score

2/6

Financial Health Score 2/6

Short Term Liabilities
Long Term Liabilities
Debt Level
Reducing Debt
Debt Coverage
Interest Coverage

Financial Position Analysis

Short Term Liabilities: NREF's short term assets ($7.8B) exceed its short term liabilities ($311.2M).

Long Term Liabilities: NREF's short term assets ($7.8B) exceed its long term liabilities ($7.2B).

Debt to Equity History and Analysis

Debt Level: NREF's net debt to equity ratio (1467.3%) 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: NREF's debt is not well covered by operating cash flow (1%).

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

Balance Sheet

Dividend

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

Dividend Score

3/6

Dividend Score 3/6

Notable Dividend
High Dividend
Stable Dividend
Growing Dividend
Earnings Coverage
Future Dividend Coverage

8.31%

Current Dividend Yield

Upcoming Dividend Payment

Dividend Yield vs Market

Notable Dividend: NREF's dividend (8.31%) is higher than the bottom 25% of dividend payers in the US market (1.54%).

High Dividend: NREF's dividend (8.31%) is in the top 25% of dividend payers in the US market (4.05%)

Stability and Growth of Payments

Stable Dividend: Whilst dividend payments have been stable, NREF has been paying a dividend for less than 10 years.

Growing Dividend: NREF's dividend payments have increased, but the company has only paid a dividend for 2 years.

Earnings Payout to Shareholders

Earnings Coverage: With its reasonably low payout ratio (38.4%), NREF's dividend payments are well covered by earnings.

Cash Payout to Shareholders

Cash Flow Coverage: With its reasonable cash payout ratio (55.2%), NREF's dividend payments are covered by cash flows.

Next Steps

Explore strong dividend paying companies in the Diversified Financials industry.

Management

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

2.3yrs

Average management tenure

CEO

Jim Dondero (58 yo)

2.25yrs

Tenure

US$1,228,500

Compensation

Mr. James David Dondero, also known as Jim, C.F.A., C.M.A., C.P.A., serves as President at NexPoint Real Estate Advisors VII, L.P. Mr. Dondero served as a Director of Vinebrook Homes Trust, Inc. until Augu...

Leadership Team

Experienced Management: NREF's management team is considered experienced (2.3 years average tenure).

Board Members

Experienced Board: NREF's board of directors are not considered experienced ( 2.3 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: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.

Ownership Breakdown

Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 13.9%.

Data	Last Updated (UTC time)
Company Analysis	2022/05/15 00:00
End of Day Share Price	2022/05/13 00:00
Earnings	2022/03/31
Annual Earnings	2021/12/31