NexPoint Real Estate Finance (NYSE:NREF – Get Free Report) and Chicago Atlantic Real Estate Finance (NASDAQ:REFI – Get Free Report) are both small-cap finance companies, but which is the better stock? We will compare the two companies based on the strength of their risk, profitability, earnings, institutional ownership, analyst recommendations, valuation and dividends.
Analyst Ratings
This is a breakdown of recent ratings and target prices for NexPoint Real Estate Finance and Chicago Atlantic Real Estate Finance, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| NexPoint Real Estate Finance | 0 | 4 | 0 | 0 | 2.00 |
| Chicago Atlantic Real Estate Finance | 0 | 0 | 2 | 1 | 3.33 |
NexPoint Real Estate Finance currently has a consensus target price of $14.50, indicating a potential upside of 12.93%. Chicago Atlantic Real Estate Finance has a consensus target price of $20.00, indicating a potential upside of 48.26%. Given Chicago Atlantic Real Estate Finance’s stronger consensus rating and higher possible upside, analysts plainly believe Chicago Atlantic Real Estate Finance is more favorable than NexPoint Real Estate Finance.
Volatility & Risk
Profitability
This table compares NexPoint Real Estate Finance and Chicago Atlantic Real Estate Finance’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| NexPoint Real Estate Finance | N/A | 11.39% | 0.58% |
| Chicago Atlantic Real Estate Finance | 64.57% | 13.17% | 10.10% |
Insider and Institutional Ownership
67.8% of NexPoint Real Estate Finance shares are owned by institutional investors. Comparatively, 25.5% of Chicago Atlantic Real Estate Finance shares are owned by institutional investors. 54.0% of NexPoint Real Estate Finance shares are owned by insiders. Comparatively, 12.3% of Chicago Atlantic Real Estate Finance shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.
Dividends
NexPoint Real Estate Finance pays an annual dividend of $2.00 per share and has a dividend yield of 15.6%. Chicago Atlantic Real Estate Finance pays an annual dividend of $1.88 per share and has a dividend yield of 13.9%. NexPoint Real Estate Finance pays out 270.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Chicago Atlantic Real Estate Finance pays out 100.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.
Valuation & Earnings
This table compares NexPoint Real Estate Finance and Chicago Atlantic Real Estate Finance”s gross revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| NexPoint Real Estate Finance | $29.20 million | 7.76 | $13.98 million | $0.74 | 17.35 |
| Chicago Atlantic Real Estate Finance | $54.78 million | 5.15 | $38.71 million | $1.88 | 7.18 |
Chicago Atlantic Real Estate Finance has higher revenue and earnings than NexPoint Real Estate Finance. Chicago Atlantic Real Estate Finance is trading at a lower price-to-earnings ratio than NexPoint Real Estate Finance, indicating that it is currently the more affordable of the two stocks.
Summary
Chicago Atlantic Real Estate Finance beats NexPoint Real Estate Finance on 11 of the 17 factors compared between the two stocks.
About NexPoint Real Estate Finance
NexPoint Real Estate Finance, Inc. operates as a commercial mortgage real estate investment trust in the United States. It focuses on originating, structuring, and investing in first-lien mortgage loans, mezzanine loans, preferred equity, convertible notes, multifamily properties, and common equity investments, as well as multifamily and single-family rental commercial mortgage-backed securities securitizations, multifamily structured credit risk notes, and mortgage-backed securities or target assets. The company has elected to be taxed as a real estate investment trust (REIT) and would not be subject to federal corporate income taxes if it distributes at least 90% of its taxable income to its stockholders. NexPoint Real Estate Finance, Inc. was incorporated in 2019 and is based in Dallas, Texas.
About Chicago Atlantic Real Estate Finance
Chicago Atlantic Real Estate Finance, Inc. operates as a commercial real estate finance company in the United States. The company engages in originating, structuring, and investing in first mortgage loans and alternative structured financings secured by commercial real estate properties. Its portfolio primarily includes offers senior loans to state-licensed operators in the cannabis industry. The company has elected to be taxed as a real estate investment trust (REIT) and would not be subject to federal corporate income taxes if it distributes at least 90% of its taxable income to its stockholders. Chicago Atlantic Real Estate Finance, Inc. was incorporated in 2021 and is headquartered in Chicago, Illinois.
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