Nexpoint Diversified Real Estate Trust (NYSE: NXDT)

Sector: Real Estate Industry: REIT - Diversified CIK: 0001356115
Market Cap 180.62 Mn
P/B 0.21
P/E -1.46
P/S 2.95
ROIC (Qtr) 0.26
Div Yield % 10.90
Rev 1y % (Qtr) -21.41
Total Debt (Qtr) 314.77 Mn
Debt/Equity (Qtr) 0.43
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About

NexPoint Diversified Real Estate Trust (NXDT) is a publicly traded real estate investment trust (REIT) that operates in the real estate industry, specifically focusing on acquiring, managing, and developing a diversified portfolio of real estate properties and investments. The company's main business activities include investing in various commercial real estate property types, such as single-family residential, multifamily, self-storage, life science, office, industrial, hospitality, and retail properties. NXDT's operations span across different...

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Investment thesis

Bull case

  • Strong tangible asset base of 1.11B provides 3.52x coverage of total debt 314.77M, indicating robust asset backing and low credit risk.
  • Cash reserves of 50.16M provide ample 3.62x coverage of acquisition spending 13.85M, enabling strategic growth opportunities.
  • Strong free cash flow of 29.17M provides 2.11x coverage of acquisition spending 13.85M, indicating disciplined M&A strategy.
  • Strong tangible asset base of 1.11B provides 79.90x coverage of acquisition spending 13.85M, enabling strategic growth.
  • Cash reserves of 50.16M provide comfortable 12.46x coverage of tax obligations 4.03M, showing strong fiscal management.

Bear case

  • Operating cash flow of 3.87M barely covers its investment activities of 42.13M, with a coverage ratio of 0.09, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Operating cash flow of 3.87M provides thin coverage of dividend payments of (5.70M) with a -0.68 ratio, suggesting potential dividend sustainability issues if operational performance deteriorates.
  • Free cash flow of 29.17M provides weak coverage of capital expenditures of (25.30M), with a -1.15 ratio suggesting additional external financing needs for growth initiatives.
  • The company's operating cash flow of 3.87M shows concerning coverage of stock compensation expenses of 4.42M, with a 0.88 ratio indicating potential earnings quality issues.
  • Operating cash flow of 3.87M provides minimal -6.41x coverage of tax expenses of (604000), suggesting potential tax planning inefficiencies or unsustainable tax positions.

Peer comparison

Companies in the REIT - Diversified
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 VICI Vici Properties Inc. 30.39 Bn 11.76 8.24 16.76 Bn
2 WPC W. P. Carey Inc. 16.39 Bn 35.15 9.55 8.72 Bn
3 BNL Broadstone Net Lease, Inc. 2.77 Bn 40.51 8.39 2.34 Bn
4 SAFE Safehold Inc. 1.15 Bn 10.07 2.99 4.59 Bn
5 AAT American Assets Trust, Inc. 1.13 Bn 20.37 2.60 1.69 Bn
6 ESRT Empire State Realty Trust, Inc. 0.91 Bn 16.82 1.33 2.06 Bn
7 CTO CTO Realty Growth, Inc. 0.60 Bn 6,383.33 35.13 0.60 Bn
8 GNL Global Net Lease, Inc. 0.57 Bn 11.86 2.57 2.93 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 0.29 0.68
EV to Cash from Ops. EV/CFO -11.87 -30.44
EV to Debt EV to Debt 1.03 1.31
EV to EBIT EV/EBIT -3.25 52.23
EV to EBITDA EV/EBITDA 14.27 6.51
EV to Free Cash Flow [EV/FCF] EV/FCF -9.50 21.01
EV to Market Cap EV to Market Cap 1.80 6.71
EV to Revenue EV/Rev 5.30 9.65
Price to Book Value [P/B] P/B 0.21 0.98
Price to Earnings [P/E] P/E -1.46 385.22
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) -9.66 -1.16
Dividend Payout Ratio % Div Payout % (Qtr) -26.70 90.61
Dividend per Basic Share Div per Share (Qtr) 0.60 1.00
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 97.56 -0.65
Interest Coverage Int. cover (Qtr) -2.43 0.73
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) 393.24 -246.98
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) -5.79 49.26
Dividend Growth (1y) % Div 1y % (Qtr) 25.00 2.40
EBIAT Growth (1y) % EBIAT 1y % (Qtr) -142.52 -20.77
EBITDA Growth (1y) % EBITDA 1y % (Qtr) -0.28 -2.00
EBIT Growth (1y) % EBIT 1y % (Qtr) -157.33 -20.80
EBT Growth (1y) % EBT 1y % (Qtr) -87.70 -13.26
EPS Growth (1y) % EPS 1y % (Qtr) -50.60 -38.39
FCF Growth (1y) % FCF 1y % (Qtr) 232.77 -62.73
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 5.03 -1.85
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.08 0.11
Cash Payout Ratio Cash Payout (Qtr) -0.22 0.34
Cash Ratio Cash Ratio 0.00 0.00
Current Ratio Current Ratio 0.00 0.00
Debt to Equity Ratio Debt/Equity (Qtr) 0.43 0.82
Interest Cover Ratio Int Coverage (Qtr) -2.43 0.73
Times Interest Earned Times Interest Earned (Qtr) -2.43 0.73
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) -57.00 38.58
EBIT Margin % EBIT Margin % (Qtr) -74.14 10.26
EBT Margin % EBT Margin % (Qtr) -104.62 -13.89
Gross Margin % Gross Margin % (Qtr) 63.70 59.91
Net Profit Margin % Net Margin % (Qtr) -109.20 -17.09