NexPoint Residential Trust (NYSE:NXRT) vs. JBG SMITH Properties (NYSE:JBGS) Critical Analysis

NexPoint Residential Trust (NYSE:NXRT) and JBG SMITH Properties (NYSE:JBGS) are both small-cap finance companies, but which is the better business? We will contrast the two companies based on the strength of their analyst recommendations, risk, dividends, profitability, earnings, valuation and institutional ownership.

Insider and Institutional Ownership

76.6% of NexPoint Residential Trust shares are held by institutional investors. Comparatively, 98.5% of JBG SMITH Properties shares are held by institutional investors. 13.0% of NexPoint Residential Trust shares are held by company insiders. Comparatively, 3.7% of JBG SMITH Properties shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Profitability

This table compares NexPoint Residential Trust and JBG SMITH Properties’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
NexPoint Residential Trust	32.93%	17.69%	4.28%
JBG SMITH Properties	-25.40%	-6.64%	-2.69%

Volatility and Risk

NexPoint Residential Trust has a beta of 1.35, indicating that its share price is 35% more volatile than the S&P 500. Comparatively, JBG SMITH Properties has a beta of 1.1, indicating that its share price is 10% more volatile than the S&P 500.

Dividends

NexPoint Residential Trust pays an annual dividend of $1.85 per share and has a dividend yield of 4.1%. JBG SMITH Properties pays an annual dividend of $0.70 per share and has a dividend yield of 4.2%. NexPoint Residential Trust pays out 65.4% of its earnings in the form of a dividend. JBG SMITH Properties pays out -50.4% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. JBG SMITH Properties is clearly the better dividend stock, given its higher yield and lower payout ratio.

Analyst Recommendations

This is a summary of recent ratings for NexPoint Residential Trust and JBG SMITH Properties, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
NexPoint Residential Trust	0	4	2	0	2.33
JBG SMITH Properties	1	0	0	0	1.00

NexPoint Residential Trust currently has a consensus target price of $43.20, suggesting a potential downside of 3.91%. JBG SMITH Properties has a consensus target price of $14.50, suggesting a potential downside of 13.74%. Given NexPoint Residential Trust’s stronger consensus rating and higher probable upside, analysts plainly believe NexPoint Residential Trust is more favorable than JBG SMITH Properties.

Valuation and Earnings

This table compares NexPoint Residential Trust and JBG SMITH Properties’ gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
NexPoint Residential Trust	$270.55 million	4.27	$44.26 million	$2.83	15.89
JBG SMITH Properties	$579.65 million	2.57	-$79.98 million	($1.39)	-12.09

NexPoint Residential Trust has higher earnings, but lower revenue than JBG SMITH Properties. JBG SMITH Properties is trading at a lower price-to-earnings ratio than NexPoint Residential Trust, indicating that it is currently the more affordable of the two stocks.

Summary

NexPoint Residential Trust beats JBG SMITH Properties on 12 of the 16 factors compared between the two stocks.

About NexPoint Residential Trust

NexPoint Residential Trust is a publicly traded REIT, with its shares listed on the New York Stock Exchange under the symbol "NXRT," primarily focused on acquiring, owning and operating well-located middle-income multifamily properties with "value-add" potential in large cities and suburban submarkets of large cities, primarily in the Southeastern and Southwestern United States. NXRT is externally advised by NexPoint Real Estate Advisors, L.P., an affiliate of NexPoint Advisors, L.P., an SEC-registered investment advisor, which has extensive real estate experience.

About JBG SMITH Properties

JBG SMITH owns, operates, invests in, and develops mixed-use properties in high growth and high barrier-to-entry submarkets in and around Washington, DC, most notably National Landing. Through an intense focus on placemaking, JBG SMITH cultivates vibrant, amenity-rich, walkable neighborhoods throughout the Washington, DC metropolitan area. Approximately 75.0% of JBG SMITH's holdings are in the National Landing submarket in Northern Virginia, which is anchored by four key demand drivers: Amazon's new headquarters; Virginia Tech's under-construction $1 billion Innovation Campus; the submarket's proximity to the Pentagon; and JBG SMITH's deployment of 5G digital infrastructure. JBG SMITH's dynamic portfolio currently comprises 14.2 million square feet of high-growth office, multifamily, and retail assets at share, 99% of which are Metro-served. It also maintains a development pipeline encompassing 8.8 million square feet of mixed-use, primarily multifamily, development opportunities. JBG SMITH is committed to the operation and development of green, smart, and healthy buildings and plans to maintain carbon neutral operations annually.