NEXPOINT REAL ESTATE FINANCE (NREF) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:NREF - US65342V1017 - REIT
14.57 USD
+0.05 (+0.34%)
We assign a fundamental rating of 6 out of 10 to NREF. NREF was compared to 68 industry peers in the Mortgage Real Estate Investment Trusts (REITs)" industry. While NREF has a great profitability rating, there are quite some concerns on its financial health. A decent growth rate in combination with a cheap valuation! Better keep an eye on NREF.
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 an excellent Return On Assets value of 1.37%, NREF belongs to the best of the industry, outperforming 91.18% of the companies in the same industry.
- Looking at the Return On Equity, with a value of 10.66%, NREF belongs to the top of the industry, outperforming 97.06% of the companies in the same industry.
- The Return On Invested Capital of NREF (1.75%) is better than 88.24% of its industry peers.
- NREF had an Average Return On Invested Capital over the past 3 years of 0.29%. This is in line with the industry average of 1.28%.
- The last Return On Invested Capital (1.75%) for NREF is above the 3 year average (0.29%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 1.37% | ||
| ROE | 10.66% | ||
| ROIC | 1.75% |
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 33.63%, NREF belongs to the top of the industry, outperforming 92.65% of the companies in the same industry.
- NREF's Profit Margin has declined in the last couple of years.
- The Operating Margin of NREF (54.32%) is better than 92.65% of its industry peers.
- NREF's Operating Margin has declined in the last couple of years.
- NREF has a Gross Margin of 79.82%. This is amongst the best in the industry. NREF outperforms 92.65% of its industry peers.
- NREF's Gross Margin has improved in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 54.32% | ||
| PM (TTM) | 33.63% | ||
| GM | 79.82% |
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
- NREF has a Return on Invested Capital (ROIC), which is just above the Cost of Capital (WACC), which means it is creating some 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
- NREF has an Altman-Z score of 0.08. This is a bad value and indicates that NREF is not financially healthy and even has some risk of bankruptcy.
- Looking at the Altman-Z score, with a value of 0.08, NREF is in the better half of the industry, outperforming 73.53% of the companies in the same industry.
- The Debt to FCF ratio of NREF is 140.38, which is on the high side as it means it would take NREF, 140.38 years of fcf income to pay off all of its debts.
- NREF's Debt to FCF ratio of 140.38 is in line compared to the rest of the industry. NREF outperforms 54.41% of its industry peers.
- NREF has a Debt/Equity ratio of 6.61. This is a high value indicating a heavy dependency on external financing.
- NREF has a Debt to Equity ratio of 6.61. This is comparable to the rest of the industry: NREF outperforms 42.65% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 6.61 | ||
| Debt/FCF | 140.39 | ||
| Altman-Z | 0.08 |
ROIC/WACC1.4
WACC1.25%
2.3 Liquidity
- NREF has a Current Ratio of 0.06. 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 Current ratio value of 0.06, NREF is not doing good in the industry: 67.65% of the companies in the same industry are doing better.
- A Quick Ratio of 0.06 indicates that NREF may have some problems paying its short term obligations.
- NREF has a worse Quick ratio (0.06) than 67.65% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.06 | ||
| Quick Ratio | 0.06 |
3. Growth
3.1 Past
- The Earnings Per Share has grown by an impressive 54.61% over the past year.
- NREF shows a decrease in Earnings Per Share. Measured over the last years, the EPS has been decreasing by -8.76% yearly.
- The Revenue has grown by 83.00% in the past year. This is a very strong growth!
- 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)54.61%
EPS 3Y-8.76%
EPS 5YN/A
EPS Q2Q%-32%
Revenue 1Y (TTM)83%
Revenue growth 3Y-2.84%
Revenue growth 5Y17.01%
Sales Q2Q%-3%
3.2 Future
- NREF is expected to show a small growth in Earnings Per Share. In the coming years, the EPS will grow by 3.65% yearly.
- The Revenue is expected to grow by 14.03% on average over the next years. This is quite good.
EPS Next Y9.08%
EPS Next 2Y4.31%
EPS Next 3Y3.65%
EPS Next 5YN/A
Revenue Next Year40.86%
Revenue Next 2Y17.83%
Revenue Next 3Y14.03%
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 stable: in the next years the growth will be about the same than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
- The Price/Earnings ratio is 6.68, 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 89.71% 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 28.82.
- A Price/Forward Earnings ratio of 7.44 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 79.41% 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 25.95.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 6.68 | ||
| Fwd PE | 7.44 |
4.2 Price Multiples
- NREF's Enterprise Value to EBITDA ratio is rather cheap when compared to the industry. NREF is cheaper than 92.65% of the companies in the same industry.
- Based on the Price/Free Cash Flow ratio, NREF is valued cheaply inside the industry as 86.76% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 8.1 | ||
| EV/EBITDA | 37.13 |
4.3 Compensation for Growth
- The 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)0.74
PEG (5Y)N/A
EPS Next 2Y4.31%
EPS Next 3Y3.65%
5. Dividend
5.1 Amount
- NREF has a Yearly Dividend Yield of 13.63%, which is a nice return.
- Compared to an average industry Dividend Yield of 11.26, NREF pays a better dividend. On top of this NREF pays more dividend than 80.88% of the companies listed in the same industry.
- NREF's Dividend Yield is rather good when compared to the S&P500 average which is at 1.82.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 13.63% |
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
- 80.04% of the earnings are spent on dividend by NREF. This is not a sustainable payout ratio.
DP80.04%
EPS Next 2Y4.31%
EPS Next 3Y3.65%
NEXPOINT REAL ESTATE FINANCE / NREF FAQ
What is the fundamental rating for NREF stock?
ChartMill assigns a fundamental rating of 6 / 10 to NREF.
What is the valuation status of NEXPOINT REAL ESTATE FINANCE (NREF) stock?
ChartMill assigns a valuation rating of 9 / 10 to NEXPOINT REAL ESTATE FINANCE (NREF). This can be considered as Undervalued.
What is the profitability of NREF stock?
NEXPOINT REAL ESTATE FINANCE (NREF) has a profitability rating of 8 / 10.
What is the valuation of NEXPOINT REAL ESTATE FINANCE based on its PE and PB ratios?
The Price/Earnings (PE) ratio for NEXPOINT REAL ESTATE FINANCE (NREF) is 6.68 and the Price/Book (PB) ratio is 0.38.
Can you provide the dividend sustainability for NREF stock?
The dividend rating of NEXPOINT REAL ESTATE FINANCE (NREF) is 5 / 10 and the dividend payout ratio is 80.04%.