NEXPOINT REAL ESTATE FINANCE (NREF) Stock Fundamental Analysis
NYSE:NREF - New York Stock Exchange, Inc. - US65342V1017 - REIT - Currency: USD
NREF gets a fundamental rating of 6 out of 10. The analysis compared the fundamentals against 67 industry peers in the Mortgage Real Estate Investment Trusts (REITs)" industry. NREF has an excellent profitability rating, but there are concerns on its financial health. NREF is growing strongly while it also seems undervalued. This is an interesting combination
1. Profitability
1.1 Basic Checks
In the past year NREF was profitable.
NREF had a positive operating cash flow in the past year.
Each year in the past 5 years NREF has been profitable.
NREF had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
NREF's Return On Assets of 0.90% is fine compared to the rest of the industry. NREF outperforms 71.64% of its industry peers.
NREF has a Return On Equity of 9.10%. This is amongst the best in the industry. NREF outperforms 94.03% of its industry peers.
Looking at the Return On Invested Capital, with a value of 1.13%, NREF is in the better half of the industry, outperforming 79.10% of the companies in the same industry.
Measured over the past 3 years, the Average Return On Invested Capital for NREF is in line with the industry average of 1.41%.
The 3 year average ROIC (0.29%) for NREF is below the current ROIC(1.13%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 0.9% | ||
| ROE | 9.1% | ||
| ROIC | 1.13% |
ROA(3y)0.17%
ROA(5y)0.23%
ROE(3y)2.48%
ROE(5y)6.54%
ROIC(3y)0.29%
ROIC(5y)0.42%
1.3 Margins
Looking at the Profit Margin, with a value of 31.43%, NREF belongs to the top of the industry, outperforming 92.54% of the companies in the same industry.
In the last couple of years the Profit Margin of NREF has declined.
The Operating Margin of NREF (49.93%) is better than 91.04% of its industry peers.
In the last couple of years the Operating Margin of NREF has declined.
With an excellent Gross Margin value of 71.04%, NREF belongs to the best of the industry, outperforming 91.04% of the companies in the same industry.
NREF's Gross Margin has improved in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 49.93% | ||
| PM (TTM) | 31.43% | ||
| GM | 71.04% |
OM growth 3Y-21.92%
OM growth 5Y-10.46%
PM growth 3Y-21.3%
PM growth 5YN/A
GM growth 3Y-5.8%
GM growth 5Y2.25%
2. Health
2.1 Basic Checks
The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so NREF is destroying value.
NREF has more shares outstanding than it did 1 year ago.
The number of shares outstanding for NREF has been increased compared to 5 years ago.
The debt/assets ratio for NREF has been reduced compared to a year ago.
2.2 Solvency
The Debt to FCF ratio of NREF is 172.90, which is on the high side as it means it would take NREF, 172.90 years of fcf income to pay off all of its debts.
NREF has a Debt to FCF ratio (172.90) which is comparable to the rest of the industry.
A Debt/Equity ratio of 8.93 is on the high side and indicates that NREF has dependencies on debt financing.
With a Debt to Equity ratio value of 8.93, NREF is not doing good in the industry: 88.06% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 8.93 | ||
| Debt/FCF | 172.9 | ||
| Altman-Z | N/A |
ROIC/WACC0.94
WACC1.21%
2.3 Liquidity
NREF has a Current Ratio of 0.07. This is a bad value and indicates that NREF is not financially healthy enough and could expect problems in meeting its short term obligations.
The Current ratio of NREF (0.07) is worse than 74.63% of its industry peers.
NREF has a Quick Ratio of 0.07. This is a bad value and indicates that NREF is not financially healthy enough and could expect problems in meeting its short term obligations.
NREF's Quick ratio of 0.07 is on the low side compared to the rest of the industry. NREF is outperformed by 74.63% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.07 | ||
| Quick Ratio | 0.07 |
3. Growth
3.1 Past
NREF shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 122.02%, which is quite impressive.
Measured over the past years, NREF shows a decrease in Earnings Per Share. The EPS has been decreasing by -8.76% on average per year.
The Revenue has grown by 19.18% in the past year. This is quite good.
NREF shows quite a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 17.01% yearly.
EPS 1Y (TTM)122.02%
EPS 3Y-8.76%
EPS 5YN/A
EPS Q2Q%-36.76%
Revenue 1Y (TTM)19.18%
Revenue growth 3Y-2.84%
Revenue growth 5Y17.01%
Sales Q2Q%25.26%
3.2 Future
Based on estimates for the next years, NREF will show a small growth in Earnings Per Share. The EPS will grow by 6.59% on average per year.
NREF is expected to show a strong growth in Revenue. In the coming years, the Revenue will grow by 23.38% yearly.
EPS Next Y12.01%
EPS Next 2Y6.59%
EPS Next 3YN/A
EPS Next 5YN/A
Revenue Next Year44.3%
Revenue Next 2Y23.38%
Revenue Next 3YN/A
Revenue Next 5YN/A
3.3 Evolution
The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
The Price/Earnings ratio is 5.63, which indicates a rather cheap valuation of NREF.
Compared to the rest of the industry, the Price/Earnings ratio of NREF indicates a rather cheap valuation: NREF is cheaper than 94.03% of the companies listed in the same industry.
NREF's Price/Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 27.24.
Based on the Price/Forward Earnings ratio of 6.66, the valuation of NREF can be described as very cheap.
NREF's Price/Forward Earnings ratio is rather cheap when compared to the industry. NREF is cheaper than 82.09% of the companies in the same industry.
The average S&P500 Price/Forward Earnings ratio is at 36.42. NREF is valued rather cheaply when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 5.63 | ||
| Fwd PE | 6.66 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, NREF is valued cheaper than 85.07% of the companies in the same industry.
NREF's Price/Free Cash Flow ratio is a bit cheaper when compared to the industry. NREF is cheaper than 68.66% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 8.77 | ||
| EV/EBITDA | 57.98 |
4.3 Compensation for Growth
NREF's low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
The excellent profitability rating of NREF may justify a higher PE ratio.
PEG (NY)0.47
PEG (5Y)N/A
EPS Next 2Y6.59%
EPS Next 3YN/A
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 14.63%, NREF is a good candidate for dividend investing.
NREF's Dividend Yield is rather good when compared to the industry average which is at 10.79. NREF pays more dividend than 83.58% of the companies in the same industry.
NREF's Dividend Yield is rather good when compared to the S&P500 average which is at 2.40.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 14.63% |
5.2 History
NREF has been paying a dividend for over 5 years, so it has already some track record.
Dividend Growth(5Y)N/A
Div Incr Years0
Div Non Decr Years0
5.3 Sustainability
NREF pays out 103.52% of its income as dividend. This is not a sustainable payout ratio.
DP103.52%
EPS Next 2Y6.59%
EPS Next 3YN/A
13.63
-0.04 (-0.29%)
Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupFinancial Services
GICS IndustryMortgage Real Estate Investment Trusts (REITs)"
Earnings (Last)
Earnings (Next)
Inst Owners68.52%
Inst Owner Change-1.43%
Ins Owners7.1%
Ins Owner Change22.57%
Market Cap241.39M
Analysts47.5
Price Target15.56 (14.16%)
Short Float %1.19%
Short Ratio3.88
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 14.63% |
Yearly Dividend2.67
Dividend Growth(5Y)N/A
DP103.52%
Div Incr Years0
Div Non Decr Years0
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)-5.27%
Min EPS beat(2)-17.97%
Max EPS beat(2)7.42%
EPS beat(4)3
Avg EPS beat(4)22.97%
Min EPS beat(4)-17.97%
Max EPS beat(4)53.19%
EPS beat(8)3
Avg EPS beat(8)8.71%
EPS beat(12)7
Avg EPS beat(12)8.31%
EPS beat(16)9
Avg EPS beat(16)6.88%
Revenue beat(2)2
Avg Revenue beat(2)21.96%
Min Revenue beat(2)1.15%
Max Revenue beat(2)42.76%
Revenue beat(4)3
Avg Revenue beat(4)16.23%
Min Revenue beat(4)-1.6%
Max Revenue beat(4)42.76%
Revenue beat(8)3
Avg Revenue beat(8)-0.6%
Revenue beat(12)5
Avg Revenue beat(12)15.81%
Revenue beat(16)9
Avg Revenue beat(16)75.3%
PT rev (1m)0%
PT rev (3m)-3.17%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-4.47%
EPS NY rev (1m)-2.63%
EPS NY rev (3m)-0.67%
Revenue NQ rev (1m)3.42%
Revenue NQ rev (3m)1.91%
Revenue NY rev (1m)2.01%
Revenue NY rev (3m)2.72%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 5.63 | ||
| Fwd PE | 6.66 | ||
| P/S | 1.56 | ||
| P/FCF | 8.77 | ||
| P/OCF | 8.74 | ||
| P/B | 0.45 | ||
| P/tB | 0.45 | ||
| EV/EBITDA | 57.98 |
EPS(TTM)2.42
EY17.75%
EPS(NY)2.05
Fwd EY15%
FCF(TTM)1.55
FCFY11.4%
OCF(TTM)1.56
OCFY11.44%
SpS8.71
BVpS30.08
TBVpS30.08
PEG (NY)0.47
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 0.9% | ||
| ROE | 9.1% | ||
| ROCE | 1.51% | ||
| ROIC | 1.13% | ||
| ROICexc | 1.14% | ||
| ROICexgc | 1.14% | ||
| OM | 49.93% | ||
| PM (TTM) | 31.43% | ||
| GM | 71.04% | ||
| FCFM | 17.83% |
ROA(3y)0.17%
ROA(5y)0.23%
ROE(3y)2.48%
ROE(5y)6.54%
ROIC(3y)0.29%
ROIC(5y)0.42%
ROICexc(3y)0.29%
ROICexc(5y)0.42%
ROICexgc(3y)0.29%
ROICexgc(5y)0.42%
ROCE(3y)0.39%
ROCE(5y)0.55%
ROICexcg growth 3Y-11.77%
ROICexcg growth 5YN/A
ROICexc growth 3Y-11.78%
ROICexc growth 5YN/A
OM growth 3Y-21.92%
OM growth 5Y-10.46%
PM growth 3Y-21.3%
PM growth 5YN/A
GM growth 3Y-5.8%
GM growth 5Y2.25%
F-Score7
Asset Turnover0.03
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 8.93 | ||
| Debt/FCF | 172.9 | ||
| Debt/EBITDA | 58.41 | ||
| Cap/Depr | 2.33% | ||
| Cap/Sales | 0.07% | ||
| Interest Coverage | 1.78 | ||
| Cash Conversion | 33.91% | ||
| Profit Quality | 56.72% | ||
| Current Ratio | 0.07 | ||
| Quick Ratio | 0.07 | ||
| Altman-Z | N/A |
F-Score7
WACC1.21%
ROIC/WACC0.94
Cap/Depr(3y)2124.95%
Cap/Depr(5y)N/A
Cap/Sales(3y)76.13%
Cap/Sales(5y)N/A
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)122.02%
EPS 3Y-8.76%
EPS 5YN/A
EPS Q2Q%-36.76%
EPS Next Y12.01%
EPS Next 2Y6.59%
EPS Next 3YN/A
EPS Next 5YN/A
Revenue 1Y (TTM)19.18%
Revenue growth 3Y-2.84%
Revenue growth 5Y17.01%
Sales Q2Q%25.26%
Revenue Next Year44.3%
Revenue Next 2Y23.38%
Revenue Next 3YN/A
Revenue Next 5YN/A
EBIT growth 1Y1559.61%
EBIT growth 3Y-24.13%
EBIT growth 5Y4.77%
EBIT Next YearN/A
EBIT Next 3YN/A
EBIT Next 5YN/A
FCF growth 1Y-36.08%
FCF growth 3Y14.5%
FCF growth 5YN/A
OCF growth 1Y-35.84%
OCF growth 3Y-15.94%
OCF growth 5YN/A