KKR Real Estate Finance Trust (NYSE:KREF) and Ladder Capital (NYSE:LADR) Head-To-Head Analysis

KKR Real Estate Finance Trust (NYSE:KREF) and Ladder Capital (NYSE:LADR) are both small-cap finance companies, but which is the superior stock? We will compare the two businesses based on the strength of their analyst recommendations, earnings, dividends, institutional ownership, valuation, risk and profitability.

Dividends

KKR Real Estate Finance Trust pays an annual dividend of $1.00 per share and has a dividend yield of 10.4%. Ladder Capital pays an annual dividend of $0.92 per share and has a dividend yield of 8.8%. KKR Real Estate Finance Trust pays out -128.2% of its earnings in the form of a dividend. Ladder Capital pays out 113.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. KKR Real Estate Finance Trust is clearly the better dividend stock, given its higher yield and lower payout ratio.

Risk and Volatility

KKR Real Estate Finance Trust has a beta of 0.96, suggesting that its share price is 4% less volatile than the S&P 500. Comparatively, Ladder Capital has a beta of 1.92, suggesting that its share price is 92% more volatile than the S&P 500.

Valuation and Earnings

This table compares KKR Real Estate Finance Trust and Ladder Capital’s 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	$175.22 million	3.80	-$30.85 million	($0.78)	-12.31
Ladder Capital	$268.99 million	4.90	$101.12 million	$0.81	12.84

Ladder Capital 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 Ladder Capital, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares KKR Real Estate Finance Trust and Ladder Capital’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%
Ladder Capital	18.92%	9.70%	2.64%

Institutional & Insider Ownership

70.2% of KKR Real Estate Finance Trust shares are owned by institutional investors. Comparatively, 62.3% of Ladder Capital shares are owned by institutional investors. 1.2% of KKR Real Estate Finance Trust shares are owned by insiders. Comparatively, 11.7% of Ladder Capital shares are owned 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 recent recommendations and price targets for KKR Real Estate Finance Trust and Ladder Capital, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
KKR Real Estate Finance Trust	0	1	4	0	2.80
Ladder Capital	0	0	3	0	3.00

KKR Real Estate Finance Trust currently has a consensus target price of $12.33, indicating a potential upside of 28.41%. Ladder Capital has a consensus target price of $12.63, indicating a potential upside of 21.39%. Given KKR Real Estate Finance Trust’s higher probable upside, equities analysts clearly believe KKR Real Estate Finance Trust is more favorable than Ladder Capital.

Summary

Ladder Capital beats KKR Real Estate Finance Trust on 10 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 Ladder Capital

Ladder Capital Corp operates as an internally-managed real estate investment trust in the United States. It operates through three segments: Loans, Securities, and Real Estate. The Loans segment originates conduit first mortgage loans that are secured by cash-flowing commercial real estate; and originates and invests in balance sheet first mortgage loans secured by commercial real estate properties that are undergoing transition, including lease-up, sell-out, and renovation or repositioning. It also invests in note purchase financings, subordinated debt, mezzanine debt, and other structured finance products related to commercial real estate. The Securities segment invests in commercial mortgage-backed securities, U.S. treasury and agency, corporate bonds, and equity securities. The Real Estate segment owns and invests in a portfolio of commercial and residential real estate properties, such as leased properties, office buildings, student housing portfolios, hotels, industrial buildings, shopping center, and condominium units. 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 founded in 2008 and is headquartered in New York, New York.