KKR Real Estate Finance Trust (NYSE:KREF – Get Free Report) and Claros Mortgage Trust (NYSE:CMTG – Get Free Report) are both small-cap finance companies, but which is the better investment? We will compare the two companies based on the strength of their institutional ownership, analyst recommendations, risk, valuation, earnings, dividends and profitability.
Insider and Institutional Ownership
70.2% of KKR Real Estate Finance Trust shares are owned by institutional investors. Comparatively, 89.5% of Claros Mortgage Trust shares are owned by institutional investors. 2.1% of KKR Real Estate Finance Trust shares are owned by insiders. Comparatively, 2.6% of Claros Mortgage Trust shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.
Profitability
This table compares KKR Real Estate Finance Trust and Claros Mortgage Trust’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| KKR Real Estate Finance Trust | -58.12% | -1.45% | -0.25% |
| Claros Mortgage Trust | -354.13% | -19.70% | -6.52% |
Valuation and Earnings
This table compares KKR Real Estate Finance Trust and Claros Mortgage Trust”s 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 | $90.12 million | 3.35 | -$47.05 million | ($3.51) | -1.50 |
| Claros Mortgage Trust | $69.81 million | 2.29 | -$489.07 million | ($3.83) | -0.30 |
KKR Real Estate Finance Trust has higher revenue and earnings than Claros Mortgage Trust. KKR Real Estate Finance Trust is trading at a lower price-to-earnings ratio than Claros Mortgage Trust, indicating that it is currently the more affordable of the two stocks.
Dividends
KKR Real Estate Finance Trust pays an annual dividend of $0.40 per share and has a dividend yield of 7.6%. Claros Mortgage Trust pays an annual dividend of $0.40 per share and has a dividend yield of 35.2%. KKR Real Estate Finance Trust pays out -11.4% of its earnings in the form of a dividend. Claros Mortgage Trust pays out -10.4% 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.
Volatility & Risk
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, Claros Mortgage Trust has a beta of 1.16, suggesting that its share price is 16% more volatile than the S&P 500.
Analyst Ratings
This is a summary of recent ratings for KKR Real Estate Finance Trust and Claros Mortgage Trust, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| KKR Real Estate Finance Trust | 2 | 5 | 1 | 1 | 2.11 |
| Claros Mortgage Trust | 3 | 1 | 0 | 0 | 1.25 |
KKR Real Estate Finance Trust presently has a consensus price target of $8.83, suggesting a potential upside of 67.77%. Claros Mortgage Trust has a consensus price target of $2.08, suggesting a potential upside of 83.55%. Given Claros Mortgage Trust’s higher probable upside, analysts plainly believe Claros Mortgage Trust is more favorable than KKR Real Estate Finance Trust.
Summary
KKR Real Estate Finance Trust beats Claros Mortgage Trust on 11 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 Claros Mortgage Trust
Claros Mortgage Trust, Inc. operates as a real estate investment trust. It focuses on originating senior and subordinate loans on transitional commercial real estate assets in the United States. The company has elected to be taxed as a real estate investment trust. As a result, it would not be subject to corporate income tax on that portion of its net income that is distributed to shareholders. The company was incorporated in 2015 and is headquartered in New York, New York.
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