NYSE:KREF

Stock Analysis Report

Executive Summary

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.


Snowflake Analysis

Fair value with acceptable track record.


Similar Companies

Share Price & News

How has KKR Real Estate Finance Trust's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: KREF has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

-2.6%

KREF

-4.8%

US Mortgage REITs

-7.4%

US Market


1 Year Return

2.8%

KREF

2.7%

US Mortgage REITs

10.5%

US Market

Return vs Industry: KREF matched the US Mortgage REITs industry which returned 2.7% over the past year.

Return vs Market: KREF underperformed the US Market which returned 10.5% over the past year.


Shareholder returns

KREFIndustryMarket
7 Day-2.6%-4.8%-7.4%
30 Day-0.8%-0.2%-3.6%
90 Day3.6%3.6%-0.6%
1 Year12.0%2.8%13.7%2.7%12.8%10.5%
3 Yearn/a37.4%-0.5%37.4%28.6%
5 Yearn/a65.0%-5.1%61.3%43.6%

Price Volatility Vs. Market

How volatile is KKR Real Estate Finance Trust's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is KKR Real Estate Finance Trust undervalued compared to its fair value and its price relative to the market?

22.4%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: KREF ($20.84) is trading below our estimate of fair value ($26.87)

Significantly Below Fair Value: KREF is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: KREF is poor value based on its PE Ratio (13.2x) compared to the Mortgage REITs industry average (12.9x).

PE vs Market: KREF is good value based on its PE Ratio (13.2x) compared to the US market (17.2x).


Price to Earnings Growth Ratio

PEG Ratio: KREF is poor value based on its PEG Ratio (1.1x)


Price to Book Ratio

PB vs Industry: KREF is overvalued based on its PB Ratio (1.1x) compared to the US Mortgage REITs industry average (1x).


Next Steps

Future Growth

How is KKR Real Estate Finance Trust forecast to perform in the next 1 to 3 years based on estimates from 6 analysts?

11.5%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: KREF's forecast earnings growth (11.5% per year) is above the savings rate (1.7%).

Earnings vs Market: KREF's earnings (11.5% per year) are forecast to grow slower than the US market (13.2% per year).

High Growth Earnings: KREF's earnings are forecast to grow, but not significantly.

Revenue vs Market: KREF's revenue (9.6% per year) is forecast to grow faster than the US market (7.6% per year).

High Growth Revenue: KREF's revenue (9.6% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: KREF's Return on Equity is forecast to be low in 3 years time (9.2%).


Next Steps

Past Performance

How has KKR Real Estate Finance Trust performed over the past 5 years?

35.2%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: KREF has high quality earnings.

Growing Profit Margin: KREF's current net profit margins (74.5%) are higher than last year (73.6%).


Past Earnings Growth Analysis

Earnings Trend: KREF has become profitable over the past 5 years, growing earnings by 35.2% per year.

Accelerating Growth: KREF's earnings growth over the past year (3.7%) is below its 5-year average (35.2% per year).

Earnings vs Industry: KREF earnings growth over the past year (3.7%) underperformed the Mortgage REITs industry 11.3%.


Return on Equity

High ROE: KREF's Return on Equity (8%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is KKR Real Estate Finance Trust's financial position? (This company is analysed differently as a bank or financial institution)


Financial Position Analysis


Debt to Equity History and Analysis


Balance Sheet

Inventory Level: KREF has a low level of unsold assets or inventory.

Debt Coverage by Assets: KREF's debt is covered by short term assets (assets are 1.3x debt).


Financial Institutions Analysis

Asset Level: KREF's level of assets compared to its equity is low.

Allowance for Bad Loans: Insufficient data to determine if KREF has a sufficient allowance for bad loans.

Low Risk Liabilities: KREF reports no customer deposits, loans are made up entirely of externally borrowed funds.

Loan Level: Insufficient data to determine if KREF has an acceptable proportion of non-loan assets held.

Low Risk Deposits: KREF has advanced significantly more loans than the customer deposits it holds.

Level of Bad Loans: Insufficient data to determine if KREF has an appropriate level of bad loans.


Next Steps

Dividend

What is KKR Real Estate Finance Trust's current dividend yield, its reliability and sustainability?

8.25%

Current Dividend Yield


Dividend Yield vs Market

company8.3%marketbottom25%1.5%markettop25%3.9%industryaverage9.7%forecastin3Years8.3%

Current dividend yield vs market & industry

Notable Dividend: KREF's dividend (8.25%) is higher than the bottom 25% of dividend payers in the US market (1.52%).

High Dividend: KREF's dividend (8.25%) is in the top 25% of dividend payers in the US market (3.9%)


Stability and Growth of Payments

Stable Dividend: Whilst dividend payments have been stable, KREF has been paying a dividend for less than 10 years.

Growing Dividend: KREF's dividend payments have increased, but the company has only paid a dividend for 2 years.


Current Payout to Shareholders

Dividend Coverage: With its high payout ratio (109.2%), KREF's dividend payments are not well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: KREF's dividends in 3 years are not forecast to be well covered by earnings (98.3% payout ratio).


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

4.3yrs

Average management tenure


CEO

Chris Lee (40yo)

4.3yrs

Tenure

US$1,256,763

Compensation

Mr. Christen E. J. Lee, also known as Chris, has been a Co-Chief Executive Officer at KKR Real Estate Finance Trust Inc. since October 2015 and also has been its Co-President since March 2016. Mr. Lee serv ...


Leadership Team

NamePositionTenureCompensationOwnership
Christen E. Lee
Co-CEO & Co-President4.3yrsUS$1.26m0.17% $2.0m
Matthew Salem
Co-President & Co-CEO4.3yrsUS$1.26m0.11% $1.3m
Mostafa Nagaty
CFO & Treasurer1.9yrsUS$593.40k0.0038% $46.0k
W. Mattson
COO & Secretary4.3yrsUS$896.33k0.041% $492.1k
Sasha Hamilton
Investor Relations Principal0yrsno datano data
Michael Shapiro
Investor Relations Officer0yrsno datano data

4.3yrs

Average Tenure

42.5yo

Average Age

Experienced Management: KREF's management team is considered experienced (4.3 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Todd Fisher
Director5.3yrsno data0.17% $2.1m
Terrance Ahern
Director2.8yrsno datano data
Ralph Rosenberg
Chairman of the Board5.3yrsno data0.44% $5.2m
Deborah McAneny
Independent Director2.8yrsUS$132.50k0.017% $207.1k
Irene Esteves
Independent Director1.7yrsUS$90.48kno data
Jonathan Langer
Independent Director2.8yrsUS$122.50k0.030% $363.5k
R. Blanchard
Director2.8yrsno datano data
Paula Madoff
Independent Director1.8yrsUS$100.63kno data

2.8yrs

Average Tenure

54yo

Average Age

Experienced Board: KREF's board of directors are not considered experienced ( 2.8 years average tenure), which suggests a new board.


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 4.2%.


Top Shareholders

Company Information

KKR Real Estate Finance Trust Inc.'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: KKR Real Estate Finance Trust Inc.
  • Ticker: KREF
  • Exchange: NYSE
  • Founded: 2014
  • Industry: Mortgage REITs
  • Sector: Diversified Financials
  • Market Cap: US$1.198b
  • Shares outstanding: 57.49m
  • Website: https://www.kkrreit.com

Location

  • KKR Real Estate Finance Trust Inc.
  • 9 West 57th Street
  • Suite 4200
  • New York
  • New York
  • 10019
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
KREFNYSE (New York Stock Exchange)YesCommon StockUSUSDMay 2017
8KRDB (Deutsche Boerse AG)YesCommon StockDEEURMay 2017

Biography

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. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/02/26 02:41
End of Day Share Price2020/02/25 00:00
Earnings2019/12/31
Annual Earnings2019/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.