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Announcing: NexPoint Residential Trust (NYSE:NXRT) Stock Increased An Energizing 112% In The Last Three Years

Simply Wall St

The most you can lose on any stock (assuming you don't use leverage) is 100% of your money. But when you pick a company that is really flourishing, you can make more than 100%. To wit, the NexPoint Residential Trust, Inc. (NYSE:NXRT) share price has flown 112% in the last three years. How nice for those who held the stock! Also pleasing for shareholders was the 11% gain in the last three months. The company reported its financial results recently; you can catch up on the latest numbers by reading our company report.

View our latest analysis for NexPoint Residential Trust

Given that NexPoint Residential Trust didn't make a profit in the last twelve months, we'll focus on revenue growth to form a quick view of its business development. Generally speaking, companies without profits are expected to grow revenue every year, and at a good clip. That's because it's hard to be confident a company will be sustainable if revenue growth is negligible, and it never makes a profit.

In the last 3 years NexPoint Residential Trust saw its revenue grow at 5.6% per year. That's not a very high growth rate considering it doesn't make profits. In contrast, the stock has popped 29% per year in that time - an impressive result. Shareholders should be pretty happy with that, although interested investors might want to examine the financial data more closely to see if the gains are really justified. It may be that the market is pretty optimistic about NexPoint Residential Trust if you look to the bottom line.

The image below shows how earnings and revenue have tracked over time (if you click on the image you can see greater detail).

NYSE:NXRT Income Statement, August 15th 2019

It's good to see that there was some significant insider buying in the last three months. That's a positive. That said, we think earnings and revenue growth trends are even more important factors to consider. So it makes a lot of sense to check out what analysts think NexPoint Residential Trust will earn in the future (free profit forecasts).

What About Dividends?

As well as measuring the share price return, investors should also consider the total shareholder return (TSR). The TSR is a return calculation that accounts for the value of cash dividends (assuming that any dividend received was reinvested) and the calculated value of any discounted capital raisings and spin-offs. It's fair to say that the TSR gives a more complete picture for stocks that pay a dividend. As it happens, NexPoint Residential Trust's TSR for the last 3 years was 136%, which exceeds the share price return mentioned earlier. This is largely a result of its dividend payments!

A Different Perspective

We're pleased to report that NexPoint Residential Trust rewarded shareholders with a total shareholder return of 41% over the last year. That includes the value of the dividend. That's better than the annualized TSR of 33% over the last three years. These improved returns may hint at some real business momentum, implying that now could be a great time to delve deeper. If you want to research this stock further, the data on insider buying is an obvious place to start. You can click here to see who has been buying shares - and the price they paid.

NexPoint Residential Trust is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on US exchanges.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.