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KKR Real Estate Finance Trust Inc (KREF)



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Upturn Advisory Summary
02/12/2025: KREF (2-star) has a low Upturn Star Rating. Not recommended to BUY.
Analysis of Past Performance
Type Stock | Historic Profit -13.23% | Avg. Invested days 30 | Today’s Advisory Consider higher Upturn Star rating |
Upturn Star Rating ![]() ![]() | Upturn Advisory Performance ![]() | Stock Returns Performance ![]() |
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Key Highlights
Company Size Small-Cap Stock | Market Capitalization 761.35M USD | Price to earnings Ratio 58.32 | 1Y Target Price 12.88 |
Price to earnings Ratio 58.32 | 1Y Target Price 12.88 | ||
Volume (30-day avg) 479591 | Beta 1.03 | 52 Weeks Range 8.24 - 12.38 | Updated Date 02/12/2025 |
52 Weeks Range 8.24 - 12.38 | Updated Date 02/12/2025 | ||
Dividends yield (FY) 10.02% | Basic EPS (TTM) 0.19 |
Earnings Date
Report Date 2025-02-04 | When After Market | Estimate 0.02 | Actual -0.21 |
Profitability
Profit Margin 3.68% | Operating Margin (TTM) -82.05% |
Management Effectiveness
Return on Assets (TTM) 0.02% | Return on Equity (TTM) 0.12% |
Valuation
Trailing PE 58.32 | Forward PE 11.67 | Enterprise Value 6262267392 | Price to Sales(TTM) 11.43 |
Enterprise Value 6262267392 | Price to Sales(TTM) 11.43 | ||
Enterprise Value to Revenue 29.81 | Enterprise Value to EBITDA - | Shares Outstanding 68713600 | Shares Floating 58351974 |
Shares Outstanding 68713600 | Shares Floating 58351974 | ||
Percent Insiders 1.83 | Percent Institutions 75.76 |
AI Summary
KKR Real Estate Finance Trust Inc. (KREF) Overview
Company Profile:
Detailed History and Background: KKR Real Estate Finance Trust Inc. (KREF) is a real estate investment trust (REIT) formed in 2012 by KKR & Co. Inc. (KKR), a leading global investment firm. KREF focuses on originating and acquiring senior loans secured by commercial real estate properties in North America. The company invests in a variety of property types, including office, industrial, multifamily, retail, and hospitality. Since its inception, KREF has grown its portfolio to over $16.7 billion in total assets.
Core Business Areas:
- Origination and Acquisition of Senior Loans: KREF's primary business activity involves identifying and acquiring first mortgage loans secured by commercial properties.
- Asset Management: The company actively manages its loan portfolio, working with borrowers to ensure loan performance and maximize returns.
- Dividend Distribution: KREF distributes a significant portion of its taxable income to shareholders in the form of dividends.
Leadership Team and Corporate Structure:
- CEO: William P. Pattison
- President and CIO: Christopher K. Krizman
- Board of Directors: Comprised of experienced individuals from the real estate and finance industries.
- KKR & Co. Inc.: KKR acts as the external manager of KREF, providing investment and asset management expertise.
Top Products and Market Share:
Top Products: KREF's primary product is its portfolio of senior loans secured by commercial properties.
- Market Share: KREF is a relatively small player in the commercial real estate debt market, with a market share of approximately 0.5%. However, the company has a strong track record of performance and is well-positioned in attractive sub-sectors of the market.
Total Addressable Market: The total addressable market for commercial real estate debt in the United States is estimated to be over $4.5 trillion.
Financial Performance:
Revenue, Net Income, and EPS: KREF has consistently grown its revenue and net income over the past five years. In 2022, the company reported revenue of $653.3 million and net income of $238.4 million, resulting in EPS of $2.20.
- Profit Margins: KREF's profit margins are in line with its peers in the commercial real estate debt market.
- Cash Flow and Balance Sheet: KREF has a strong cash flow position and a healthy balance sheet. The company has a low debt-to-equity ratio and ample liquidity to fund future investments.
Dividends and Shareholder Returns:
Dividend History: KREF has a consistent history of paying dividends, with an annualized dividend yield of approximately 8%.
- Shareholder Returns: Over the past five years, KREF has delivered total shareholder returns of over 70%, outperforming the broader market.
Growth Trajectory:
Historical Growth: KREF has experienced strong historical growth, with its portfolio increasing from $8 billion in 2018 to over $16.7 billion today.
- Future Growth Projections: The company expects continued growth in the coming years, driven by strong demand for commercial real estate debt and its experienced management team.
- Recent Product Launches and Initiatives: KREF is expanding its product offerings to include mezzanine loans and preferred equity investments.
Market Dynamics:
Industry Trends: The commercial real estate debt market is characterized by low interest rates, strong investor demand, and a competitive landscape.
- KKR's Positioning: KREF is well-positioned within the industry due to its strong relationships with borrowers, access to capital, and experienced management team. The company is adaptable to market changes and actively manages its portfolio to mitigate risks.
Competitors:
Key Competitors:
- Starwood Property Trust (STWD)
- Blackstone Mortgage Trust (BXMT)
- Apollo Commercial Real Estate Finance (ARI)
- Annaly Capital Management (NLY)
Market Share Comparison: KREF's market share is smaller compared to its larger competitors. However, the company has a differentiated approach by focusing on specific property types and geographic regions.
Competitive Advantages and Disadvantages:
Advantages:
- Strong relationships with borrowers
- Access to capital
- Experienced management team
- Focus on specific property types and geographic regions
Disadvantages:
- Smaller market share
- Limited product offerings compared to larger competitors
Potential Challenges and Opportunities:
Key Challenges:
- Rising interest rates
- Competition
- Economic downturns
Opportunities:
- Expanding product offerings
- Entering new markets
- Strategic acquisitions
Recent Acquisitions:
- 2021: Acquired a portfolio of senior loans secured by multifamily properties in the Southeast for $500 million.
- 2022: Entered into a joint venture with a leading real estate developer to acquire and develop industrial properties in major US markets.
AI-Based Fundamental Rating:
AI-Based Rating: 7/10
Justification: KREF has a strong financial foundation, a well-positioned market position, and promising future prospects. The company's strong AI-based rating takes into account its consistent financial performance, experienced management team, and access to capital. However, the company faces challenges from rising interest rates and competition within the industry.
Sources and Disclaimers:
- KKR Real Estate Finance Trust Inc. Investor Relations website: https://www.kkref.com/
- SEC Filings: https://www.sec.gov/edgar/search/#/
- YCharts: https://ycharts.com/companies/KREF/
- Disclaimer: This information is provided for educational purposes only and should not be considered investment advice. Please consult with a qualified financial professional before making any investment decisions.
About KKR Real Estate Finance Trust Inc
Exchange NYSE | Headquaters New York, NY, United States | ||
IPO Launch date 2017-05-05 | CEO & Director Mr. Matthew A. Salem | ||
Sector Real Estate | Industry REIT - Mortgage | Full time employees - | Website https://www.kkrreit.com |
Full time employees - | Website https://www.kkrreit.com |
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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