KKR Real Estate Finance Trust (NYSE:KREF) and Saul Centers (NYSE:BFS) are both small-cap finance companies, but which is the better stock? We will contrast the two businesses based on the strength of their valuation, profitability, dividends, analyst recommendations, institutional ownership, earnings and risk.
Insider & Institutional Ownership
73.0% of KKR Real Estate Finance Trust shares are owned by institutional investors. Comparatively, 46.7% of Saul Centers shares are owned by institutional investors. 0.9% of KKR Real Estate Finance Trust shares are owned by company insiders. Comparatively, 48.5% of Saul Centers shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.
KKR Real Estate Finance Trust pays an annual dividend of $1.72 per share and has a dividend yield of 8.5%. Saul Centers pays an annual dividend of $2.12 per share and has a dividend yield of 4.0%. KKR Real Estate Finance Trust pays out 89.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Saul Centers pays out 68.2% of its earnings in the form of a dividend. Saul Centers has raised its dividend for 5 consecutive years.
This is a breakdown of recent ratings and target prices for KKR Real Estate Finance Trust and Saul Centers, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|KKR Real Estate Finance Trust||0||2||2||0||2.50|
KKR Real Estate Finance Trust currently has a consensus target price of $21.25, indicating a potential upside of 4.68%. Saul Centers has a consensus target price of $58.00, indicating a potential upside of 9.43%. Given Saul Centers’ higher probable upside, analysts clearly believe Saul Centers is more favorable than KKR Real Estate Finance Trust.
This table compares KKR Real Estate Finance Trust and Saul Centers’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|KKR Real Estate Finance Trust||48.98%||9.15%||1.87%|
Valuation and Earnings
This table compares KKR Real Estate Finance Trust and Saul Centers’ gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|KKR Real Estate Finance Trust||$183.57 million||6.55||$89.74 million||$1.92||10.57|
|Saul Centers||$227.90 million||5.29||$50.55 million||$3.11||17.04|
KKR Real Estate Finance Trust has higher earnings, but lower revenue than Saul Centers. KKR Real Estate Finance Trust is trading at a lower price-to-earnings ratio than Saul Centers, indicating that it is currently the more affordable of the two stocks.
Volatility & Risk
KKR Real Estate Finance Trust has a beta of 0.12, indicating that its share price is 88% less volatile than the S&P 500. Comparatively, Saul Centers has a beta of 1, indicating that its share price has a similar volatility profile to the S&P 500.
Saul Centers beats KKR Real Estate Finance Trust on 10 of the 17 factors compared between the two stocks.
KKR Real Estate Finance Trust Company Profile
KKR Real Estate Finance Trust Inc., a real estate finance company, focuses primarily on originating and acquiring senior loans secured by commercial real estate assets. The company engages in the origination and purchase of credit investments related to commercial real estate, including leveraged and unleveraged commercial mortgage loans, and commercial mortgage-backed securities. It 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. The company was founded in 2014 and is headquartered in New York, New York.
Saul Centers Company Profile
Saul Centers, Inc. is a self-managed, self-administered equity REIT headquartered in Bethesda, Maryland, which currently operates and manages a real estate portfolio of 60 properties which includes (a) 49 community and neighborhood shopping centers and seven mixed-use properties with approximately 9.3 million square feet of leasable area and (b) four land and development properties. Over 85% of the Saul Centers' property operating income is generated by properties in the metropolitan Washington, DC/Baltimore area.
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