Contrasting NexPoint Real Estate Finance (NYSE:NREF) & AGNC Investment (NASDAQ:AGNCO)

AGNC Investment (NASDAQ:AGNCO) and NexPoint Real Estate Finance (NYSE:NREF) are both finance companies, but which is the superior investment? We will contrast the two companies based on the strength of their profitability, analyst recommendations, earnings, institutional ownership, dividends, valuation and risk.

Profitability

This table compares AGNC Investment and NexPoint Real Estate Finance’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
AGNC Investment	N/A	N/A	N/A
NexPoint Real Estate Finance	107.93%	12.68%	0.92%

Analyst Ratings

This is a summary of recent ratings and price targets for AGNC Investment and NexPoint Real Estate Finance, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
AGNC Investment	0	0	0	0	0.00
NexPoint Real Estate Finance	0	4	0	0	2.00

NexPoint Real Estate Finance has a consensus target price of $16.75, suggesting a potential downside of 0.89%. Given NexPoint Real Estate Finance’s stronger consensus rating and higher possible upside, analysts plainly believe NexPoint Real Estate Finance is more favorable than AGNC Investment.

Dividends

AGNC Investment pays an annual dividend of $1.63 per share and has a dividend yield of 6.4%. NexPoint Real Estate Finance pays an annual dividend of $2.00 per share and has a dividend yield of 11.8%. NexPoint Real Estate Finance pays out 84.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Institutional & Insider Ownership

67.8% of NexPoint Real Estate Finance shares are held by institutional investors. 59.9% of NexPoint Real Estate Finance shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Valuation & Earnings

This table compares AGNC Investment 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
AGNC Investment	$2.40 billion	N/A	N/A	N/A	N/A
NexPoint Real Estate Finance	$89.95 million	3.54	$105.10 million	$2.37	7.13

NexPoint Real Estate Finance has lower revenue, but higher earnings than AGNC Investment.

Summary

NexPoint Real Estate Finance beats AGNC Investment on 8 of the 10 factors compared between the two stocks.

About AGNC Investment

AGNC Investment Corp. provides private capital to housing market in the United States. It invests in residential mortgage pass-through securities and collateralized mortgage obligations for which the principal and interest payments are guaranteed by the United States government-sponsored enterprise or by the United States government agency. The company qualifies as a real estate investment trust for federal income tax purposes. It generally would not be subject to federal corporate income taxes if it distributes at least 90% of its taxable income to its stockholders. The company was formerly known as American Capital Agency Corp. and changed its name to AGNC Investment Corp. in September 2016. AGNC Investment Corp. was incorporated in 2008 and is headquartered in Bethesda, Maryland.

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.