Chicago Atlantic Real Estate Finance (NASDAQ:REFI – Get Free Report) and NexPoint Real Estate Finance (NYSE:NREF – Get Free Report) are both small-cap finance companies, but which is the superior stock? We will contrast the two businesses based on the strength of their institutional ownership, earnings, risk, analyst recommendations, profitability, dividends and valuation.
Profitability
This table compares Chicago Atlantic Real Estate Finance and NexPoint Real Estate Finance’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Chicago Atlantic Real Estate Finance | 64.57% | 13.17% | 10.10% |
| NexPoint Real Estate Finance | N/A | 11.39% | 0.58% |
Insider & Institutional Ownership
25.5% of Chicago Atlantic Real Estate Finance shares are owned by institutional investors. Comparatively, 67.8% of NexPoint Real Estate Finance shares are owned by institutional investors. 12.3% of Chicago Atlantic Real Estate Finance shares are owned by company insiders. Comparatively, 54.0% of NexPoint Real Estate Finance shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.
Valuation & Earnings
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Chicago Atlantic Real Estate Finance | $54.78 million | 5.21 | $38.71 million | $1.88 | 7.26 |
| NexPoint Real Estate Finance | $29.20 million | 8.11 | $13.98 million | $0.74 | 18.14 |
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.
Volatility & Risk
Chicago Atlantic Real Estate Finance has a beta of 0.26, indicating that its share price is 74% less volatile than the S&P 500. Comparatively, NexPoint Real Estate Finance has a beta of 1.34, indicating that its share price is 34% more volatile than the S&P 500.
Analyst Recommendations
This is a summary of current recommendations and price targets for Chicago Atlantic Real Estate Finance and NexPoint Real Estate Finance, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Chicago Atlantic Real Estate Finance | 0 | 0 | 2 | 1 | 3.33 |
| NexPoint Real Estate Finance | 0 | 4 | 0 | 0 | 2.00 |
Chicago Atlantic Real Estate Finance currently has a consensus price target of $20.00, indicating a potential upside of 46.52%. NexPoint Real Estate Finance has a consensus price target of $14.50, indicating a potential upside of 8.05%. Given Chicago Atlantic Real Estate Finance’s stronger consensus rating and higher probable upside, research analysts plainly believe Chicago Atlantic Real Estate Finance is more favorable than NexPoint Real Estate Finance.
Dividends
Chicago Atlantic Real Estate Finance pays an annual dividend of $1.88 per share and has a dividend yield of 13.8%. NexPoint Real Estate Finance pays an annual dividend of $2.00 per share and has a dividend yield of 14.9%. 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. 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.
Summary
Chicago Atlantic Real Estate Finance beats NexPoint Real Estate Finance on 11 of the 17 factors compared between the two stocks.
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.
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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