KKR Real Estate Finance Trust (NYSE:KREF – Get Free Report) and NexPoint Real Estate Finance (NYSE:NREF – Get Free Report) are both small-cap finance companies, but which is the better stock? We will contrast the two businesses based on the strength of their profitability, risk, institutional ownership, valuation, dividends, analyst recommendations and earnings.
Dividends
KKR Real Estate Finance Trust pays an annual dividend of $1.00 per share and has a dividend yield of 15.7%. NexPoint Real Estate Finance pays an annual dividend of $2.00 per share and has a dividend yield of 12.9%. KKR Real Estate Finance Trust pays out -53.8% of its earnings in the form of a dividend. NexPoint Real Estate Finance pays out 76.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. KKR Real Estate Finance Trust is clearly the better dividend stock, given its higher yield and lower payout ratio.
Analyst Recommendations
This is a breakdown of recent ratings and recommmendations for KKR Real Estate Finance Trust and NexPoint Real Estate Finance, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| KKR Real Estate Finance Trust | 2 | 5 | 1 | 0 | 1.88 |
| NexPoint Real Estate Finance | 1 | 3 | 0 | 0 | 1.75 |
Insider and Institutional Ownership
70.2% of KKR Real Estate Finance Trust shares are held by institutional investors. Comparatively, 67.8% of NexPoint Real Estate Finance shares are held by institutional investors. 2.1% of KKR Real Estate Finance Trust shares are held by company insiders. Comparatively, 54.0% of NexPoint Real Estate Finance shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.
Risk & Volatility
KKR Real Estate Finance Trust has a beta of 0.81, indicating that its share price is 19% less volatile than the S&P 500. Comparatively, NexPoint Real Estate Finance has a beta of 1.12, indicating that its share price is 12% more volatile than the S&P 500.
Earnings and Valuation
This table compares KKR Real Estate Finance Trust and NexPoint Real Estate Finance”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 | 0.94 | -$47.05 million | ($1.86) | -3.43 |
| NexPoint Real Estate Finance | $89.95 million | 3.22 | $105.10 million | $2.62 | 5.91 |
NexPoint Real Estate Finance has lower revenue, but higher earnings than KKR Real Estate Finance Trust. KKR Real Estate Finance Trust is trading at a lower price-to-earnings ratio than NexPoint Real Estate Finance, indicating that it is currently the more affordable of the two stocks.
Profitability
This table compares KKR Real Estate Finance Trust and NexPoint Real Estate Finance’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% | -0.78% | -0.14% |
| NexPoint Real Estate Finance | 117.74% | 13.30% | 0.92% |
Summary
NexPoint Real Estate Finance 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 NexPoint Real Estate Finance
NexPoint Real Estate Finance, Inc. operates as a commercial mortgage real estate investment trust in the United States. It focuses on originating, structuring, and investing in first-lien mortgage loans, mezzanine loans, preferred equity, convertible notes, multifamily properties, and common equity investments, as well as multifamily and single-family rental commercial mortgage-backed securities securitizations, multifamily structured credit risk notes, and mortgage-backed securities or target assets. The company has elected to be taxed as a real estate investment trust (REIT) and would not be subject to federal corporate income taxes if it distributes at least 90% of its taxable income to its stockholders. NexPoint Real Estate Finance, Inc. was incorporated in 2019 and is based in Dallas, Texas.
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