T
o justify the effort of selecting individual stocks, it's essential to beat market index fund returns. However, stock picking comes with a risk: buying underperforming companies. Long-term NexPoint Real Estate Finance (NYSE:NREF) shareholders have experienced this, with their share price dropping 32% in three years versus a 57% market return.

    We've identified 21 US stocks forecast to pay over 6% dividend yield next year. Markets are a powerful pricing mechanism, but share prices reflect investor sentiment, not just business performance. By comparing earnings per share (EPS) and share price changes, we can gauge how investor attitudes have shifted over time. During five years of growth, NexPoint Real Estate Finance transitioned from loss to profitability, yet its share price declined.

    The dividend seems healthy, so it's unlikely the cause of the drop. Revenue has increased over the last three years, suggesting potential for investors if the company can sustain this growth. To understand recent weakness, examine earnings and revenue changes over time.

    NexPoint Real Estate Finance has improved its bottom line lately, but what does the future hold? Analysts' predictions are available in an interactive graph of future profit estimates. When evaluating investment returns, consider total shareholder return (TSR) versus share price return. TSR accounts for dividend payments and discounted capital raisings, providing a more comprehensive picture for dividend-paying stocks.

    NexPoint Real Estate Finance's TSR over the last three years was 2.7%, exceeding its share price return due to its dividend payments.