KKR Real Estate Finance Trust (NYSE:KREF – Get Free Report) and AFC Gamma (NASDAQ:AFCG – Get Free Report) are both small-cap finance companies, but which is the better stock? We will contrast the two companies based on the strength of their valuation, risk, earnings, institutional ownership, profitability, dividends and analyst recommendations.
Earnings and Valuation
This table compares KKR Real Estate Finance Trust and AFC Gamma”s top-line revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| KKR Real Estate Finance Trust | $435.60 million | 1.05 | -$47.05 million | ($1.05) | -6.75 |
| AFC Gamma | $51.99 million | 0.96 | $16.78 million | ($1.04) | -2.13 |
Risk and Volatility
KKR Real Estate Finance Trust has a beta of 0.88, suggesting that its share price is 12% less volatile than the S&P 500. Comparatively, AFC Gamma has a beta of 1.02, suggesting that its share price is 2% more volatile than the S&P 500.
Profitability
This table compares KKR Real Estate Finance Trust and AFC Gamma’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| KKR Real Estate Finance Trust | -10.80% | -1.13% | -0.22% |
| AFC Gamma | -70.46% | 8.45% | 4.90% |
Analyst Recommendations
This is a breakdown of recent ratings and target prices for KKR Real Estate Finance Trust and AFC Gamma, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| KKR Real Estate Finance Trust | 2 | 3 | 2 | 0 | 2.00 |
| AFC Gamma | 1 | 3 | 0 | 0 | 1.75 |
KKR Real Estate Finance Trust currently has a consensus target price of $10.00, indicating a potential upside of 41.14%. AFC Gamma has a consensus target price of $5.75, indicating a potential upside of 160.18%. Given AFC Gamma’s higher possible upside, analysts clearly believe AFC Gamma is more favorable than KKR Real Estate Finance Trust.
Dividends
KKR Real Estate Finance Trust pays an annual dividend of $1.00 per share and has a dividend yield of 14.1%. AFC Gamma pays an annual dividend of $0.60 per share and has a dividend yield of 27.1%. KKR Real Estate Finance Trust pays out -95.2% of its earnings in the form of a dividend. AFC Gamma pays out -57.7% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years.
Institutional & Insider Ownership
70.2% of KKR Real Estate Finance Trust shares are held by institutional investors. Comparatively, 26.5% of AFC Gamma shares are held by institutional investors. 1.9% of KKR Real Estate Finance Trust shares are held by insiders. Comparatively, 25.1% of AFC Gamma shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.
Summary
AFC Gamma beats KKR Real Estate Finance Trust on 9 of the 16 factors compared between the two stocks.
About KKR Real Estate Finance Trust
KKR Real Estate Finance Trust Inc., a mortgage real estate investment trust, focuses primarily on originating and acquiring transitional senior loans secured by commercial real estate (CRE) assets. It engages in the origination and purchase of credit investments related to CRE, including leveraged and unleveraged commercial real estate loans. The company has elected to be taxed as a real estate investment trust and would not be subject to federal corporate income taxes if it distributes at least 90% of its taxable income to its stockholders. KKR Real Estate Finance Trust Inc. was incorporated in 2014 and is headquartered in New York, New York.
About AFC Gamma
AFC Gamma, Inc. originates, structures, underwrites, and invests in senior secured loans, and other various commercial real estate loans and debt securities for established companies operating in the cannabis industry. It primarily originates loans structured as senior loans secured by real estate, equipment, and licenses and/or other assets of the loan parties to the extent permitted by applicable laws and the regulations governing such loan parties. The company has elected and qualified to be taxed as a real estate investment trust for the United States federal income tax purposes under the Internal Revenue Code of 1986. AFC Gamma, Inc. was incorporated in 2020 and is based in West Palm Beach, Florida.
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