KKR Real Estate Finance Trust (NYSE:KREF) and AGNC Investment (NASDAQ:AGNCM) Critical Analysis

KKR Real Estate Finance Trust (NYSE:KREF) and AGNC Investment (NASDAQ:AGNCM) are both real estate companies, but which is the better investment? We will compare the two businesses based on the strength of their dividends, valuation, profitability, earnings, risk, institutional ownership and analyst recommendations.

Earnings & Valuation

This table compares KKR Real Estate Finance Trust and AGNC Investment’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	$175.22 million	3.75	-$30.85 million	($0.78)	-12.15
AGNC Investment	$251.00 million	N/A	N/A	N/A	N/A

AGNC Investment has higher revenue and earnings than KKR Real Estate Finance Trust.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
KKR Real Estate Finance Trust	-4.82%	10.59%	2.01%
AGNC Investment	N/A	N/A	N/A

Dividends

KKR Real Estate Finance Trust pays an annual dividend of $1.00 per share and has a dividend yield of 10.5%. AGNC Investment pays an annual dividend of $1.72 per share and has a dividend yield of 7.0%. KKR Real Estate Finance Trust pays out -128.2% of its earnings in the form of a dividend.

Institutional and Insider Ownership

70.2% of KKR Real Estate Finance Trust shares are held by institutional investors. 1.6% of KKR Real Estate Finance Trust 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.

Analyst Recommendations

This is a breakdown of current ratings and price targets for KKR Real Estate Finance Trust and AGNC Investment, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
KKR Real Estate Finance Trust	0	2	4	0	2.67
AGNC Investment	0	0	0	0	N/A

KKR Real Estate Finance Trust presently has a consensus price target of $12.36, suggesting a potential upside of 30.35%. Given KKR Real Estate Finance Trust’s higher possible upside, research analysts clearly believe KKR Real Estate Finance Trust is more favorable than AGNC Investment.

Summary

KKR Real Estate Finance Trust beats AGNC Investment on 8 of the 10 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 AGNC Investment

AGNC Investment Corp. provides private capital to housing market in the United States. It invests in residential mortgage pass-through securities and collateralized mortgage obligations for which the principal and interest payments are guaranteed by the United States government-sponsored enterprise or by the United States government agency. 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. The company was formerly known as American Capital Agency Corp. and changed its name to AGNC Investment Corp. in September 2016. AGNC Investment Corp. was incorporated in 2008 and is headquartered in Bethesda, Maryland.