Contrasting KKR Real Estate Finance Trust (NYSE:KREF) & AG Mortgage Investment Trust (NYSE:MITT)

KKR Real Estate Finance Trust (NYSE:KREF) and AG Mortgage Investment Trust (NYSE:MITT) are both small-cap finance companies, but which is the better business? We will contrast the two companies based on the strength of their earnings, dividends, institutional ownership, profitability, valuation, analyst recommendations and risk.

Institutional & Insider Ownership

70.2% of KKR Real Estate Finance Trust shares are held by institutional investors. Comparatively, 27.3% of AG Mortgage Investment Trust shares are held by institutional investors. 2.1% of KKR Real Estate Finance Trust shares are held by company insiders. Comparatively, 3.3% of AG Mortgage Investment Trust shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Risk and Volatility

KKR Real Estate Finance Trust has a beta of 0.91, meaning that its share price is 9% less volatile than the S&P 500. Comparatively, AG Mortgage Investment Trust has a beta of 1.69, meaning that its share price is 69% more volatile than the S&P 500.

Dividends

KKR Real Estate Finance Trust pays an annual dividend of $1.00 per share and has a dividend yield of 16.6%. AG Mortgage Investment Trust pays an annual dividend of $0.96 per share and has a dividend yield of 12.0%. KKR Real Estate Finance Trust pays out -95.2% of its earnings in the form of a dividend. AG Mortgage Investment Trust pays out 109.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. AG Mortgage Investment Trust has raised its dividend for 2 consecutive years. KKR Real Estate Finance Trust is clearly the better dividend stock, given its higher yield and lower payout ratio.

Analyst Recommendations

This is a summary of recent ratings and target prices for KKR Real Estate Finance Trust and AG Mortgage Investment Trust, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
KKR Real Estate Finance Trust	1	4	2	0	2.14
AG Mortgage Investment Trust	0	3	5	0	2.63

KKR Real Estate Finance Trust presently has a consensus price target of $9.00, indicating a potential upside of 49.63%. AG Mortgage Investment Trust has a consensus price target of $9.25, indicating a potential upside of 15.91%. Given KKR Real Estate Finance Trust’s higher probable upside, research analysts plainly believe KKR Real Estate Finance Trust is more favorable than AG Mortgage Investment Trust.

Earnings & Valuation

This table compares KKR Real Estate Finance Trust and AG Mortgage Investment Trust”s 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	0.89	-$47.05 million	($1.05)	-5.73
AG Mortgage Investment Trust	$480.33 million	0.53	$48.67 million	$0.88	9.07

AG Mortgage Investment Trust has higher revenue and earnings than KKR Real Estate Finance Trust. KKR Real Estate Finance Trust is trading at a lower price-to-earnings ratio than AG Mortgage Investment Trust, indicating that it is currently the more affordable of the two stocks.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
KKR Real Estate Finance Trust	-23.55%	-0.76%	-0.15%
AG Mortgage Investment Trust	10.13%	14.42%	0.59%

Summary

AG Mortgage Investment Trust beats KKR Real Estate Finance Trust on 12 of the 17 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 AG Mortgage Investment Trust

AG Mortgage Investment Trust, Inc. operates as a residential mortgage real estate investment trust in the United States. Its investment portfolio includes residential investments, including non-agency loans, agency-eligible loans, re-and non-performing loans, and non-agency residential mortgage-backed securities, as well as commercial loans and commercial mortgage-backed securities. The company qualifies as a real estate investment trust for federal income tax purposes. It generally would not be subject to federal corporate income taxes if it distributes at least 90% of its taxable income to its stockholders. AG Mortgage Investment Trust, Inc. was incorporated in 2011 and is based in New York, New York.