Reviewing Ladder Capital (NYSE:LADR) & KKR Real Estate Finance Trust (NYSE:KREF)

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

Analyst Recommendations

This is a summary of current ratings and price targets for Ladder Capital and KKR Real Estate Finance Trust, as reported by MarketBeat.

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

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

Risk & Volatility

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

Earnings and Valuation

This table compares Ladder Capital and KKR Real Estate Finance Trust’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Ladder Capital $268.99 million 4.90 $101.12 million $0.81 12.84
KKR Real Estate Finance Trust $175.22 million 3.80 -$30.85 million ($0.78) -12.31

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 Ladder Capital and KKR Real Estate Finance Trust’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Ladder Capital 18.92% 9.70% 2.64%
KKR Real Estate Finance Trust -4.82% 10.59% 2.01%

Dividends

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 an annual dividend of $1.00 per share and has a dividend yield of 10.4%. 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 pays out -128.2% of its earnings in the form of a dividend. KKR Real Estate Finance Trust is clearly the better dividend stock, given its higher yield and lower payout ratio.

Institutional & Insider Ownership

62.3% of Ladder Capital shares are held by institutional investors. Comparatively, 70.2% of KKR Real Estate Finance Trust shares are held by institutional investors. 11.7% of Ladder Capital shares are held by company insiders. Comparatively, 1.2% of KKR Real Estate Finance Trust shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Summary

Ladder Capital beats KKR Real Estate Finance Trust on 10 of the 16 factors compared between the two stocks.

About Ladder Capital

(Get Free Report)

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.

About KKR Real Estate Finance Trust

(Get Free Report)

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.

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