Capital Trust (NYSE: BXMT) and KKR Real Estate Finance Trust (NASDAQ:KREF) are both finance companies, but which is the superior stock? We will compare the two companies based on the strength of their risk, earnings, dividends, institutional ownership, valuation, profitability and analyst recommendations.

Dividends

Capital Trust pays an annual dividend of $2.48 per share and has a dividend yield of 7.9%. KKR Real Estate Finance Trust does not pay a dividend. Capital Trust pays out 106.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Capital Trust has increased its dividend for 3 consecutive years.

Valuation & Earnings

This table compares Capital Trust and KKR Real Estate Finance Trust’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Capital Trust $298.97 million 10.00 $220.95 million $2.33 13.53
KKR Real Estate Finance Trust $59.48 million 19.26 N/A N/A N/A

Capital Trust has higher revenue and earnings than KKR Real Estate Finance Trust.

Analyst Recommendations

This is a breakdown of current ratings and target prices for Capital Trust and KKR Real Estate Finance Trust, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Capital Trust 0 3 3 0 2.50
KKR Real Estate Finance Trust 0 3 0 0 2.00

Capital Trust currently has a consensus price target of $33.50, indicating a potential upside of 6.25%. KKR Real Estate Finance Trust has a consensus price target of $22.75, indicating a potential upside of 6.66%. Given KKR Real Estate Finance Trust’s higher probable upside, analysts plainly believe KKR Real Estate Finance Trust is more favorable than Capital Trust.

Profitability

This table compares Capital Trust and KKR Real Estate Finance Trust’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Capital Trust 55.05% 8.76% 2.43%
KKR Real Estate Finance Trust 64.81% 6.60% 0.87%

Institutional and Insider Ownership

61.3% of Capital Trust shares are owned by institutional investors. 0.9% of Capital Trust shares are owned 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.

Summary

Capital Trust beats KKR Real Estate Finance Trust on 9 of the 14 factors compared between the two stocks.

Capital Trust Company Profile

Blackstone Mortgage Trust, Inc. is a holding company. The Company conducts its operations as a real estate investment trust for the United States federal income tax purposes. The Company originates and purchases senior loans collateralized by properties in North America and Europe. The Company’s business is focused on originating or acquiring senior, floating rate mortgage loans that are secured by a first priority mortgage on commercial real estate assets primarily in the office, lodging, retail, residential and industrial sectors. These investments may be in the form of whole loans or may also include pari passu participations within mortgage loans. It directly originates, co-originates and acquires debt instruments in conjunction with acquisitions, refinancings and recapitalizations of commercial real estate. The Company’s manager is BXMT Advisors L.L.C.

KKR Real Estate Finance Trust Company Profile

KKR Real Estate Finance Trust Inc is a real estate finance company that focuses primarily on originating and acquiring senior mortgage loans secured by commercial real estate assets (CRE). KKR manages investments across multiple asset classes, including private equity, real estate, energy, infrastructure, credit and hedge funds. The Company’s investment strategy is to originate or acquire senior mortgage loans collateralized by institutional-quality CRE assets. Its target assets also include mezzanine loans, preferred equity and other debt-oriented instruments. The Company’s investment objective is capital preservation and generating attractive risk-adjusted returns for its stockholders over the long term, primarily through dividends.

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