NEXPOINT REAL ESTATE FINANCE (NREF) Stock Fundamental Analysis
NYSE:NREF - New York Stock Exchange, Inc. - US65342V1017 - REIT - Currency: USD
Overall NREF gets a fundamental rating of 5 out of 10. We evaluated NREF against 65 industry peers in the Mortgage Real Estate Investment Trusts (REITs)" industry. There are concerns on the financial health of NREF while its profitability can be described as average. NREF is evaluated to be cheap and growing strongly. This does not happen too often!
1. Profitability
1.1 Basic Checks
In the past year NREF was profitable.
In the past year NREF had a positive cash flow from operations.
In the past 5 years NREF has always been profitable.
In the past 5 years NREF always reported a positive cash flow from operatings.
1.2 Ratios
With a Return On Assets value of 0.33%, NREF perfoms like the industry average, outperforming 43.08% of the companies in the same industry.
The Return On Equity of NREF (3.67%) is comparable to the rest of the industry.
The Return On Invested Capital of NREF (0.53%) is comparable to the rest of the industry.
The Average Return On Invested Capital over the past 3 years for NREF is in line with the industry average of 1.68%.
The 3 year average ROIC (0.29%) for NREF is below the current ROIC(0.53%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 0.33% | ||
| ROE | 3.67% | ||
| ROIC | 0.53% |
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
NREF's Profit Margin of 15.16% is fine compared to the rest of the industry. NREF outperforms 69.23% of its industry peers.
In the last couple of years the Profit Margin of NREF has declined.
NREF has a better Operating Margin (31.22%) than 87.69% of its industry peers.
NREF's Operating Margin has declined in the last couple of years.
NREF's Gross Margin of 60.63% is amongst the best of the industry. NREF outperforms 89.23% of its industry peers.
In the last couple of years the Gross Margin of NREF has grown nicely.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 31.22% | ||
| PM (TTM) | 15.16% | ||
| GM | 60.63% |
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
With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), NREF is destroying value.
Compared to 1 year ago, NREF has more shares outstanding
NREF has more shares outstanding than it did 5 years ago.
Compared to 1 year ago, NREF has an improved debt to assets ratio.
2.2 Solvency
Based on the Altman-Z score of 0.00, we must say that NREF is in the distress zone and has some risk of bankruptcy.
Looking at the Altman-Z score, with a value of 0.00, NREF is in line with its industry, outperforming 58.46% of the companies in the same industry.
The Debt to FCF ratio of NREF is 164.76, which is on the high side as it means it would take NREF, 164.76 years of fcf income to pay off all of its debts.
NREF has a Debt to FCF ratio (164.76) which is comparable to the rest of the industry.
NREF has a Debt/Equity ratio of 10.01. This is a high value indicating a heavy dependency on external financing.
The Debt to Equity ratio of NREF (10.01) is worse than 89.23% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 10.01 | ||
| Debt/FCF | 164.76 | ||
| Altman-Z | 0 |
ROIC/WACC0.42
WACC1.27%
2.3 Liquidity
A Current Ratio of 0.01 indicates that NREF may have some problems paying its short term obligations.
With a Current ratio value of 0.01, NREF is not doing good in the industry: 87.69% of the companies in the same industry are doing better.
NREF has a Quick Ratio of 0.01. This is a bad value and indicates that NREF is not financially healthy enough and could expect problems in meeting its short term obligations.
With a Quick ratio value of 0.01, NREF is not doing good in the industry: 87.69% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.01 | ||
| Quick Ratio | 0.01 |
3. Growth
3.1 Past
NREF shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 206.90%, which is quite impressive.
NREF shows a decrease in Earnings Per Share. Measured over the last years, the EPS has been decreasing by -8.76% yearly.
NREF shows a strong growth in Revenue. In the last year, the Revenue has grown by 97.64%.
Measured over the past years, NREF shows a quite strong growth in Revenue. The Revenue has been growing by 17.01% on average per year.
EPS 1Y (TTM)206.9%
EPS 3Y-8.76%
EPS 5YN/A
EPS Q2Q%189.13%
Revenue 1Y (TTM)97.64%
Revenue growth 3Y-2.84%
Revenue growth 5Y17.01%
Sales Q2Q%139.47%
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 6.86% on average per year.
The Revenue is expected to grow by 21.09% on average over the next years. This is a very strong growth
EPS Next Y15.03%
EPS Next 2Y6.86%
EPS Next 3YN/A
EPS Next 5YN/A
Revenue Next Year41.46%
Revenue Next 2Y21.09%
Revenue Next 3YN/A
Revenue Next 5YN/A
3.3 Evolution
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
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 5.53, 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 92.31% of the companies listed in the same industry.
The average S&P500 Price/Earnings ratio is at 26.25. NREF is valued rather cheaply when compared to this.
A Price/Forward Earnings ratio of 7.19 indicates a rather cheap valuation of NREF.
Compared to the rest of the industry, the Price/Forward Earnings ratio of NREF indicates a somewhat cheap valuation: NREF is cheaper than 75.38% of the companies listed in the same industry.
NREF's Price/Forward Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 22.15.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 5.53 | ||
| Fwd PE | 7.19 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of NREF indicates a rather cheap valuation: NREF is cheaper than 81.54% of the companies listed in the same industry.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of NREF indicates a somewhat cheap valuation: NREF is cheaper than 72.31% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 8.93 | ||
| EV/EBITDA | 115.07 |
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 decent profitability rating of NREF may justify a higher PE ratio.
PEG (NY)0.37
PEG (5Y)N/A
EPS Next 2Y6.86%
EPS Next 3YN/A
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 13.48%, NREF is a good candidate for dividend investing.
Compared to an average industry Dividend Yield of 14.08, NREF pays a bit more dividend than its industry peers.
NREF's Dividend Yield is rather good when compared to the S&P500 average which is at 2.38.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 13.48% |
5.2 History
NREF has been paying a dividend for over 5 years, so it has already some track record.
NREF has not decreased its dividend in the last 3 years.
Dividend Growth(5Y)N/A
Div Incr Years3
Div Non Decr Years3
5.3 Sustainability
NREF pays out 261.92% of its income as dividend. This is not a sustainable payout ratio.
DP261.92%
EPS Next 2Y6.86%
EPS Next 3YN/A
14.77
-0.07 (-0.47%)
Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupFinancial Services
GICS IndustryMortgage Real Estate Investment Trusts (REITs)"
Earnings (Last)
Earnings (Next)
Inst Owners70.18%
Inst Owner Change0.52%
Ins Owners6.44%
Ins Owner Change22.57%
Market Cap261.58M
Analysts47.5
Price Target15.81 (7.04%)
Short Float %0.69%
Short Ratio2.33
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 13.48% |
Yearly Dividend2.67
Dividend Growth(5Y)N/A
DP261.92%
Div Incr Years3
Div Non Decr Years3
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)30.3%
Min EPS beat(2)7.42%
Max EPS beat(2)53.19%
EPS beat(4)3
Avg EPS beat(4)27.03%
Min EPS beat(4)-1.73%
Max EPS beat(4)53.19%
EPS beat(8)4
Avg EPS beat(8)11.66%
EPS beat(12)8
Avg EPS beat(12)10.06%
EPS beat(16)10
Avg EPS beat(16)8.92%
Revenue beat(2)2
Avg Revenue beat(2)32.69%
Min Revenue beat(2)22.62%
Max Revenue beat(2)42.76%
Revenue beat(4)2
Avg Revenue beat(4)10.63%
Min Revenue beat(4)-21.24%
Max Revenue beat(4)42.76%
Revenue beat(8)3
Avg Revenue beat(8)3.64%
Revenue beat(12)5
Avg Revenue beat(12)52.45%
Revenue beat(16)9
Avg Revenue beat(16)93.72%
PT rev (1m)-4.62%
PT rev (3m)-3.12%
EPS NQ rev (1m)2.62%
EPS NQ rev (3m)-11.71%
EPS NY rev (1m)2.01%
EPS NY rev (3m)-10.77%
Revenue NQ rev (1m)-1.44%
Revenue NQ rev (3m)1.78%
Revenue NY rev (1m)0.7%
Revenue NY rev (3m)5.09%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 5.53 | ||
| Fwd PE | 7.19 | ||
| P/S | 2.24 | ||
| P/FCF | 8.93 | ||
| P/OCF | 8.93 | ||
| P/B | 0.54 | ||
| P/tB | 0.54 | ||
| EV/EBITDA | 115.07 |
EPS(TTM)2.67
EY18.08%
EPS(NY)2.06
Fwd EY13.92%
FCF(TTM)1.65
FCFY11.2%
OCF(TTM)1.65
OCFY11.2%
SpS6.59
BVpS27.23
TBVpS27.23
PEG (NY)0.37
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 0.33% | ||
| ROE | 3.67% | ||
| ROCE | 0.71% | ||
| ROIC | 0.53% | ||
| ROICexc | 0.53% | ||
| ROICexgc | 0.53% | ||
| OM | 31.22% | ||
| PM (TTM) | 15.16% | ||
| GM | 60.63% | ||
| FCFM | 25.09% |
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 Turnover0.02
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 10.01 | ||
| Debt/FCF | 164.76 | ||
| Debt/EBITDA | 114.71 | ||
| Cap/Depr | 0% | ||
| Cap/Sales | 0% | ||
| Interest Coverage | 0.86 | ||
| Cash Conversion | 69.62% | ||
| Profit Quality | 165.5% | ||
| Current Ratio | 0.01 | ||
| Quick Ratio | 0.01 | ||
| Altman-Z | 0 |
F-Score7
WACC1.27%
ROIC/WACC0.42
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)206.9%
EPS 3Y-8.76%
EPS 5YN/A
EPS Q2Q%189.13%
EPS Next Y15.03%
EPS Next 2Y6.86%
EPS Next 3YN/A
EPS Next 5YN/A
Revenue 1Y (TTM)97.64%
Revenue growth 3Y-2.84%
Revenue growth 5Y17.01%
Sales Q2Q%139.47%
Revenue Next Year41.46%
Revenue Next 2Y21.09%
Revenue Next 3YN/A
Revenue Next 5YN/A
EBIT growth 1Y94.5%
EBIT growth 3Y-24.13%
EBIT growth 5Y4.77%
EBIT Next YearN/A
EBIT Next 3YN/A
EBIT Next 5YN/A
FCF growth 1Y-7.2%
FCF growth 3Y14.5%
FCF growth 5YN/A
OCF growth 1Y-7.2%
OCF growth 3Y-15.94%
OCF growth 5YN/A