NEXPOINT REAL ESTATE FINANCE (NREF)
US65342V1017 - REIT
We assign a fundamental rating of 3 out of 10 to NREF. NREF was compared to 64 industry peers in the Mortgage Real Estate Investment Trusts (REITs)" industry. While NREF is still in line with the averages on profitability rating, there are concerns on its financial health. NREF has a decent growth rate and is not valued too expensively.
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.
Of the past 5 years NREF 4 years were profitable.
Of the past 5 years NREF 4 years had a positive operating cash flow.
1.2 Ratios
NREF has a Return On Assets (0.15%) which is comparable to the rest of the industry.
NREF has a Return On Equity of 2.92%. This is comparable to the rest of the industry: NREF outperforms 53.13% of its industry peers.
Looking at the Return On Invested Capital, with a value of 0.21%, NREF is doing worse than 68.75% of the companies in the same industry.
The Average Return On Invested Capital over the past 3 years for NREF is in line with the industry average of 1.59%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 0.15% | ||
| ROE | 2.92% | ||
| ROIC | 0.21% |
ROA(3y)0.22%
ROA(5y)0.17%
ROE(3y)6.8%
ROE(5y)N/A
ROIC(3y)0.37%
ROIC(5y)N/A
1.3 Margins
Looking at the Profit Margin, with a value of 10.62%, NREF is in line with its industry, outperforming 53.13% 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 (19.14%) is better than 65.63% of its industry peers.
In the last couple of years the Operating Margin of NREF has declined.
With a decent Gross Margin value of 43.09%, NREF is doing good in the industry, outperforming 71.88% of the companies in the same industry.
NREF's Gross Margin has declined in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 19.14% | ||
| PM (TTM) | 10.62% | ||
| GM | 43.09% |
OM growth 3Y-28.59%
OM growth 5YN/A
PM growth 3Y-14.61%
PM growth 5YN/A
GM growth 3Y-10.71%
GM growth 5YN/A
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 a worse debt/assets ratio than last year.
2.2 Solvency
NREF has an Altman-Z score of -0.02. 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 -0.02, NREF is in line with its industry, outperforming 54.69% of the companies in the same industry.
The Debt to FCF ratio of NREF is 207.83, which is on the high side as it means it would take NREF, 207.83 years of fcf income to pay off all of its debts.
NREF has a worse Debt to FCF ratio (207.83) than 64.06% of its industry peers.
NREF has a Debt/Equity ratio of 18.42. This is a high value indicating a heavy dependency on external financing.
NREF has a Debt to Equity ratio of 18.42. This is amonst the worse of the industry: NREF underperforms 98.44% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 18.42 | ||
| Debt/FCF | 207.83 | ||
| Altman-Z | -0.02 |
ROIC/WACC0.2
WACC1.07%
2.3 Liquidity
NREF has a Current Ratio of 0.04. 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 Current ratio of 0.04. This is amonst the worse of the industry: NREF underperforms 82.81% of its industry peers.
NREF has a Quick Ratio of 0.04. 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 0.04, NREF is not doing good in the industry: 82.81% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.04 | ||
| Quick Ratio | 0.04 |
3. Growth
3.1 Past
The earnings per share for NREF have decreased strongly by -32.97% in the last year.
The Earnings Per Share has been growing slightly by 5.62% on average over the past years.
NREF shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 12.71%.
Measured over the past years, NREF shows a quite strong growth in Revenue. The Revenue has been growing by 14.59% on average per year.
EPS 1Y (TTM)-32.97%
EPS 3Y5.62%
EPS 5YN/A
EPS growth Q2Q-10.2%
Revenue 1Y (TTM)12.71%
Revenue growth 3Y14.59%
Revenue growth 5YN/A
Revenue growth Q2Q56.26%
3.2 Future
NREF is expected to show a small growth in Earnings Per Share. In the coming years, the EPS will grow by 2.08% yearly.
The Revenue is expected to grow by 7.06% on average over the next years.
EPS Next Y-48.54%
EPS Next 2Y2.08%
EPS Next 3YN/A
EPS Next 5YN/A
Revenue Next Year-2%
Revenue Next 2Y7.06%
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 decreasing.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
4. Valuation
4.1 Price/Earnings Ratio
The Price/Earnings ratio is 7.11, which indicates a rather cheap valuation of NREF.
Compared to the rest of the industry, the Price/Earnings ratio of NREF indicates a somewhat cheap valuation: NREF is cheaper than 79.69% of the companies listed in the same industry.
The average S&P500 Price/Earnings ratio is at 25.25. NREF is valued rather cheaply when compared to this.
A Price/Forward Earnings ratio of 13.81 indicates a correct valuation of NREF.
60.94% of the companies in the same industry are cheaper than NREF, based on the Price/Forward Earnings ratio.
When comparing the Price/Forward Earnings ratio of NREF to the average of the S&P500 Index (21.67), we can say NREF is valued slightly cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 7.11 | ||
| Fwd PE | 13.81 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of NREF is on the same level as its industry peers.
71.88% 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 | 7.33 | ||
| EV/EBITDA | 305.15 |
4.3 Compensation for Growth
PEG (NY)N/A
PEG (5Y)N/A
EPS Next 2Y2.08%
EPS Next 3YN/A
5. Dividend
5.1 Amount
NREF has a Yearly Dividend Yield of 15.37%, which is a nice return.
NREF's Dividend Yield is rather good when compared to the industry average which is at 13.34. NREF pays more dividend than 90.63% of the companies in the same industry.
NREF's Dividend Yield is rather good when compared to the S&P500 average which is at 2.45.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 15.37% |
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 495.20% of its income as dividend. This is not a sustainable payout ratio.
DP495.2%
EPS Next 2Y2.08%
EPS Next 3YN/A
NEXPOINT REAL ESTATE FINANCE
NYSE:NREF (4/24/2024, 7:19:40 PM)
After market: 13.15 0 (0%)13.15
+0.02 (+0.15%)
Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupFinancial Services
GICS IndustryMortgage Real Estate Investment Trusts (REITs)"
Earnings (Last)
Earnings (Next)
Inst Owners
Inst Owner Change
Ins Owners
Ins Owner Change
Market Cap231.31M
Analysts
Price Target
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 15.37% |
Dividend Growth(5Y)
DP
Div Incr Years
Div Non Decr Years
Ex-Date
Surprises & Revisions
EPS beat(2)
Avg EPS beat(2)
Min EPS beat(2)
Max EPS beat(2)
EPS beat(4)
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Min EPS beat(4)
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EPS beat(8)
Avg EPS beat(8)
EPS beat(12)
Avg EPS beat(12)
EPS beat(16)
Avg EPS beat(16)
Revenue beat(2)
Avg Revenue beat(2)
Min Revenue beat(2)
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Revenue beat(4)
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Revenue beat(8)
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Revenue beat(12)
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Revenue beat(16)
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PT rev (1m)
PT rev (3m)
EPS NQ rev (1m)
EPS NQ rev (3m)
EPS NY rev (1m)
EPS NY rev (3m)
Revenue NQ rev (1m)
Revenue NQ rev (3m)
Revenue NY rev (1m)
Revenue NY rev (3m)
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 7.11 | ||
| Fwd PE | 13.81 | ||
| P/S | |||
| P/FCF | |||
| P/OCF | |||
| P/B | |||
| P/tB | |||
| EV/EBITDA |
EPS(TTM)
EY
EPS(NY)
Fwd EY
FCF(TTM)
FCFY
OCF(TTM)
OCFY
SpS
BVpS
TBVpS
PEG (NY)N/A
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 0.15% | ||
| ROE | 2.92% | ||
| ROCE | |||
| ROIC | |||
| ROICexc | |||
| ROICexgc | |||
| OM | 19.14% | ||
| PM (TTM) | 10.62% | ||
| GM | 43.09% | ||
| FCFM |
ROA(3y)
ROA(5y)
ROE(3y)
ROE(5y)
ROIC(3y)
ROIC(5y)
ROICexc(3y)
ROICexc(5y)
ROICexgc(3y)
ROICexgc(5y)
ROCE(3y)
ROCE(5y)
ROICexcg growth 3Y
ROICexcg growth 5Y
ROICexc growth 3Y
ROICexc growth 5Y
OM growth 3Y
OM growth 5Y
PM growth 3Y
PM growth 5Y
GM growth 3Y
GM growth 5Y
F-Score
Asset Turnover0.01
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 18.42 | ||
| Debt/FCF | |||
| Debt/EBITDA | |||
| Cap/Depr | |||
| Cap/Sales | |||
| Interest Coverage | |||
| Cash Conversion | |||
| Profit Quality | |||
| Current Ratio | 0.04 | ||
| Quick Ratio | 0.04 | ||
| Altman-Z |
F-Score
WACC
ROIC/WACC
Cap/Depr(3y)
Cap/Depr(5y)
Cap/Sales(3y)
Cap/Sales(5y)
Profit Quality(3y)
Profit Quality(5y)
Growth
EPS 1Y (TTM)-32.97%
EPS 3Y5.62%
EPS 5Y
EPS growth Q2Q
EPS Next Y-48.54%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)12.71%
Revenue growth 3Y14.59%
Revenue growth 5Y
Revenue growth Q2Q
Revenue Next Year
Revenue Next 2Y
Revenue Next 3Y
Revenue Next 5Y
EBIT growth 1Y
EBIT growth 3Y
EBIT growth 5Y
EBIT Next Year
EBIT Next 3Y
EBIT Next 5Y
FCF growth 1Y
FCF growth 3Y
FCF growth 5Y
OCF growth 1Y
OCF growth 3Y
OCF growth 5Y