American Homes 4 Rent (NYSE:AMH – Get Free Report) and NexPoint Real Estate Finance (NYSE:NREF – Get Free Report) are both finance companies, but which is the better business? We will compare the two businesses based on the strength of their risk, valuation, institutional ownership, earnings, dividends, profitability and analyst recommendations.
Dividends
American Homes 4 Rent pays an annual dividend of $1.04 per share and has a dividend yield of 2.7%. NexPoint Real Estate Finance pays an annual dividend of $2.00 per share and has a dividend yield of 12.5%. American Homes 4 Rent pays out 106.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. NexPoint Real Estate Finance pays out -363.6% of its earnings in the form of a dividend. NexPoint Real Estate Finance is clearly the better dividend stock, given its higher yield and lower payout ratio.
Analyst Ratings
This is a summary of current ratings and recommmendations for American Homes 4 Rent and NexPoint Real Estate Finance, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| American Homes 4 Rent | 0 | 5 | 10 | 0 | 2.67 |
| NexPoint Real Estate Finance | 0 | 2 | 0 | 0 | 2.00 |
Earnings & Valuation
This table compares American Homes 4 Rent and NexPoint Real Estate Finance’s top-line revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| American Homes 4 Rent | $1.68 billion | 8.48 | $380.17 million | $0.98 | 39.62 |
| NexPoint Real Estate Finance | -$10.22 million | -27.74 | $13.98 million | ($0.55) | -29.09 |
American Homes 4 Rent has higher revenue and earnings than NexPoint Real Estate Finance. NexPoint Real Estate Finance is trading at a lower price-to-earnings ratio than American Homes 4 Rent, indicating that it is currently the more affordable of the two stocks.
Profitability
This table compares American Homes 4 Rent and NexPoint Real Estate Finance’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| American Homes 4 Rent | 21.83% | 4.91% | 2.96% |
| NexPoint Real Estate Finance | 23.44% | 7.09% | 0.34% |
Volatility and Risk
American Homes 4 Rent has a beta of 0.74, indicating that its stock price is 26% less volatile than the S&P 500. Comparatively, NexPoint Real Estate Finance has a beta of 1.61, indicating that its stock price is 61% more volatile than the S&P 500.
Insider & Institutional Ownership
91.9% of American Homes 4 Rent shares are owned by institutional investors. Comparatively, 67.8% of NexPoint Real Estate Finance shares are owned by institutional investors. 6.3% of American Homes 4 Rent shares are owned by insiders. Comparatively, 54.0% of NexPoint Real Estate Finance shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.
Summary
American Homes 4 Rent beats NexPoint Real Estate Finance on 10 of the 16 factors compared between the two stocks.
About American Homes 4 Rent
AMH (NYSE: AMH) is a leading large-scale integrated owner, operator and developer of single-family rental homes. We're an internally managed Maryland real estate investment trust (REIT) focused on acquiring, developing, renovating, leasing and managing homes as rental properties. Our goal is to simplify the experience of leasing a home and deliver peace of mind to households across the country. In recent years, we've been named one of Fortune's 2023 Best Workplaces in Real Estate, a 2023 Great Place to Work, a 2023 Most Loved Workplace, a 2023 Top U.S. Homebuilder by Builder100, and one of America's Most Responsible Companies 2023 and America's Most Trustworthy Companies 2023 by Newsweek and Statista Inc. As of December 31, 2023, we owned nearly 60,000 single-family properties in the Southeast, Midwest, Southwest and Mountain West regions of the United States.
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.
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