NEXPOINT REAL ESTATE FINANCE (NREF) Stock Fundamental Analysis
NYSE:NREF - New York Stock Exchange, Inc. - US65342V1017 - REIT - Currency: USD
We assign a fundamental rating of 5 out of 10 to NREF. NREF was compared to 65 industry peers in the Mortgage Real Estate Investment Trusts (REITs)" industry. NREF has a medium profitability rating, but doesn't score so well on its financial health evaluation. An interesting combination arises when we look at growth and value: NREF is growing strongly while it also seems undervalued.
1. Profitability
1.1 Basic Checks
NREF had positive earnings in the past year.
NREF had a positive operating cash flow in the past year.
NREF had positive earnings in each of the past 5 years.
In the past 5 years NREF always reported a positive cash flow from operatings.
1.2 Ratios
NREF's Return On Assets of 0.33% is in line compared to the rest of the industry. NREF outperforms 43.08% of its industry peers.
NREF has a Return On Equity (3.67%) which is in line with its industry peers.
NREF has a Return On Invested Capital of 0.53%. This is comparable to the rest of the industry: NREF outperforms 50.77% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 0.33% | ||
| ROE | 3.67% | ||
| ROIC | 0.53% |
ROA(3y)N/A
ROA(5y)N/A
ROE(3y)N/A
ROE(5y)N/A
ROIC(3y)N/A
ROIC(5y)N/A
1.3 Margins
NREF has a Profit Margin of 15.16%. This is in the better half 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 89.23% of its industry peers.
In the last couple of years the Operating Margin of NREF has declined.
With an excellent Gross Margin value of 60.63%, NREF belongs to the best of the industry, outperforming 89.23% of the companies in the same industry.
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-10.48%
PM growth 3Y-21.31%
PM growth 5YN/A
GM growth 3Y-5.79%
GM growth 5Y2.22%
2. Health
2.1 Basic Checks
With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), NREF is destroying value.
NREF has no outstanding debt. Therefor its Debt/Equity and Debt/FCF ratios are 0 and belong to the best of the industry.
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.
NREF's Altman-Z score of 0.00 is in line compared to the rest of the industry. NREF outperforms 58.46% of its industry peers.
NREF has a debt to FCF ratio of 164.76. This is a negative value and a sign of low solvency as NREF would need 164.76 years to pay back of all of its debts.
NREF has a Debt to FCF ratio of 164.76. This is in the lower half of the industry: NREF underperforms 60.00% of its industry peers.
NREF has a Debt/Equity ratio of 10.01. This is a high value indicating a heavy dependency on external financing.
With a Debt to Equity ratio value of 10.01, NREF is not doing good in the industry: 89.23% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 10.01 | ||
| Debt/FCF | 164.76 | ||
| Altman-Z | 0 |
ROIC/WACC0.25
WACC2.11%
2.3 Liquidity
NREF has a Current 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.
NREF has a worse Current ratio (0.01) than 87.69% of its industry peers.
A Quick Ratio of 0.01 indicates that NREF may have some problems paying 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
The Earnings Per Share has grown by an impressive 206.90% over the past year.
The Earnings Per Share has been decreasing by -8.76% on average over the past years.
The Revenue has grown by 19.18% in the past year. This is quite good.
The Revenue has been growing by 17.02% on average over the past years. This is quite good.
EPS 1Y (TTM)206.9%
EPS 3Y-8.76%
EPS 5YN/A
EPS Q2Q%189.13%
Revenue 1Y (TTM)19.18%
Revenue growth 3Y-2.85%
Revenue growth 5Y17.02%
Sales Q2Q%25.04%
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 4.85% on average per year.
The Revenue is expected to grow by 21.95% on average over the next years. This is a very strong growth
EPS Next Y12.77%
EPS Next 2Y4.85%
EPS Next 3YN/A
EPS Next 5YN/A
Revenue Next Year40.48%
Revenue Next 2Y21.95%
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.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
4. Valuation
4.1 Price/Earnings Ratio
Based on the Price/Earnings ratio of 5.45, the valuation of NREF can be described as very cheap.
Based on the Price/Earnings ratio, NREF is valued cheaply inside the industry as 90.77% of the companies are valued more expensively.
When comparing the Price/Earnings ratio of NREF to the average of the S&P500 Index (28.22), we can say NREF is valued rather cheaply.
The Price/Forward Earnings ratio is 7.36, which indicates a rather cheap valuation of NREF.
Based on the Price/Forward Earnings ratio, NREF is valued cheaper than 81.54% of the companies in the same industry.
Compared to an average S&P500 Price/Forward Earnings ratio of 20.86, NREF is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 5.45 | ||
| Fwd PE | 7.36 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, NREF is valued cheaper than 81.54% of the companies in the same industry.
73.85% of the companies in the same industry are more expensive than NREF, based on the Price/Free Cash Flow ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 8.77 | ||
| EV/EBITDA | 114.82 |
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)0.43
PEG (5Y)N/A
EPS Next 2Y4.85%
EPS Next 3YN/A
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 13.99%, NREF is a good candidate for dividend investing.
NREF's Dividend Yield is comparable with the industry average which is at 14.23.
Compared to an average S&P500 Dividend Yield of 2.44, NREF pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 13.99% |
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
261.92% of the earnings are spent on dividend by NREF. This is not a sustainable payout ratio.
DP261.92%
EPS Next 2Y4.85%
EPS Next 3YN/A
14.56
+0.26 (+1.82%)
Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupFinancial Services
GICS IndustryMortgage Real Estate Investment Trusts (REITs)"
Earnings (Last)
Earnings (Next)
Inst Owners70.18%
Inst Owner Change-0.33%
Ins Owners6.44%
Ins Owner Change22.57%
Market Cap256.84M
Analysts47.5
Price Target16.07 (10.37%)
Short Float %0.63%
Short Ratio2.33
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 13.99% |
Yearly Dividend3.02
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)-3.08%
PT rev (3m)-4.55%
EPS NQ rev (1m)-11.98%
EPS NQ rev (3m)-13.7%
EPS NY rev (1m)-11.85%
EPS NY rev (3m)-12.85%
Revenue NQ rev (1m)-2.11%
Revenue NQ rev (3m)3.27%
Revenue NY rev (1m)-2.17%
Revenue NY rev (3m)4.36%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 5.45 | ||
| Fwd PE | 7.36 | ||
| P/S | 2.2 | ||
| P/FCF | 8.77 | ||
| P/OCF | 8.77 | ||
| P/B | 0.53 | ||
| P/tB | 0.53 | ||
| EV/EBITDA | 114.82 |
EPS(TTM)2.67
EY18.34%
EPS(NY)1.98
Fwd EY13.59%
FCF(TTM)1.66
FCFY11.4%
OCF(TTM)1.66
OCFY11.4%
SpS6.62
BVpS27.33
TBVpS27.33
PEG (NY)0.43
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)N/A
ROA(5y)N/A
ROE(3y)N/A
ROE(5y)N/A
ROIC(3y)N/A
ROIC(5y)N/A
ROICexc(3y)N/A
ROICexc(5y)N/A
ROICexgc(3y)N/A
ROICexgc(5y)N/A
ROCE(3y)N/A
ROCE(5y)N/A
ROICexcg growth 3YN/A
ROICexcg growth 5YN/A
ROICexc growth 3YN/A
ROICexc growth 5YN/A
OM growth 3Y-21.92%
OM growth 5Y-10.48%
PM growth 3Y-21.31%
PM growth 5YN/A
GM growth 3Y-5.79%
GM growth 5Y2.22%
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
WACC2.11%
ROIC/WACC0.25
Cap/Depr(3y)2121.26%
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 Y12.77%
EPS Next 2Y4.85%
EPS Next 3YN/A
EPS Next 5YN/A
Revenue 1Y (TTM)19.18%
Revenue growth 3Y-2.85%
Revenue growth 5Y17.02%
Sales Q2Q%25.04%
Revenue Next Year40.48%
Revenue Next 2Y21.95%
Revenue Next 3YN/A
Revenue Next 5YN/A
EBIT growth 1Y94.45%
EBIT growth 3Y-24.14%
EBIT growth 5Y4.75%
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