KKR REAL ESTATE FINANCE TRUS (KREF) Stock Fundamental Analysis
NYSE:KREF - New York Stock Exchange, Inc. - US48251K1007 - REIT - Currency: USD
We assign a fundamental rating of 4 out of 10 to KREF. KREF was compared to 65 industry peers in the Mortgage Real Estate Investment Trusts (REITs)" industry. While KREF seems to be doing ok healthwise, there are quite some concerns on its profitability. KREF has a valuation in line with the averages, but it does not seem to be growing.
1. Profitability
1.1 Basic Checks
In the past year KREF has reported negative net income.
In the past year KREF had a positive cash flow from operations.
Of the past 5 years KREF 4 years were profitable.
KREF had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
With a Return On Assets value of 0.21%, KREF is not doing good in the industry: 63.08% of the companies in the same industry are doing better.
The Return On Equity of KREF (0.97%) is worse than 63.08% of its industry peers.
KREF's Return On Invested Capital of 0.45% is in line compared to the rest of the industry. KREF outperforms 47.69% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 0.21% | ||
| ROE | 0.97% | ||
| ROIC | 0.45% |
ROA(3y)-0.1%
ROA(5y)0.53%
ROE(3y)-0.63%
ROE(5y)2.49%
ROIC(3y)N/A
ROIC(5y)N/A
1.3 Margins
The Profit Margin of KREF (2.20%) is worse than 63.08% of its industry peers.
KREF's Profit Margin has declined in the last couple of years.
KREF has a worse Operating Margin (5.82%) than 63.08% of its industry peers.
KREF's Operating Margin has declined in the last couple of years.
KREF has a Gross Margin of 30.50%. This is in the better half of the industry: KREF outperforms 66.15% of its industry peers.
In the last couple of years the Gross Margin of KREF has declined.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 5.82% | ||
| PM (TTM) | 2.2% | ||
| GM | 30.5% |
OM growth 3Y-50.23%
OM growth 5Y-29.01%
PM growth 3Y-62.88%
PM growth 5Y-41.56%
GM growth 3Y-20.56%
GM growth 5Y-6.79%
2. Health
2.1 Basic Checks
KREF has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.
Compared to 1 year ago, KREF has less shares outstanding
The number of shares outstanding for KREF has been increased compared to 5 years ago.
The debt/assets ratio for KREF has been reduced compared to a year ago.
2.2 Solvency
Based on the Altman-Z score of 0.05, we must say that KREF is in the distress zone and has some risk of bankruptcy.
The Altman-Z score of KREF (0.05) is better than 67.69% of its industry peers.
KREF has a debt to FCF ratio of 37.36. This is a negative value and a sign of low solvency as KREF would need 37.36 years to pay back of all of its debts.
KREF's Debt to FCF ratio of 37.36 is fine compared to the rest of the industry. KREF outperforms 64.62% of its industry peers.
KREF has a Debt/Equity ratio of 3.51. This is a high value indicating a heavy dependency on external financing.
KREF has a better Debt to Equity ratio (3.51) than 63.08% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 3.51 | ||
| Debt/FCF | 37.36 | ||
| Altman-Z | 0.05 |
ROIC/WACC0.07
WACC6.79%
2.3 Liquidity
A Current Ratio of 0.34 indicates that KREF may have some problems paying its short term obligations.
With a decent Current ratio value of 0.34, KREF is doing good in the industry, outperforming 66.15% of the companies in the same industry.
KREF has a Quick Ratio of 0.34. This is a bad value and indicates that KREF is not financially healthy enough and could expect problems in meeting its short term obligations.
With a decent Quick ratio value of 0.34, KREF is doing good in the industry, outperforming 66.15% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.34 | ||
| Quick Ratio | 0.34 |
3. Growth
3.1 Past
KREF shows a strong negative growth in Earnings Per Share. In the last year the EPS decreased by -221.43%.
Measured over the past years, KREF shows a very negative growth in Earnings Per Share. The EPS has been decreasing by -34.56% on average per year.
KREF shows a very negative growth in Revenue. In the last year, the Revenue has decreased by -10.20%.
KREF shows quite a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 16.21% yearly.
EPS 1Y (TTM)-221.43%
EPS 3Y-55.99%
EPS 5Y-34.56%
EPS Q2Q%43.24%
Revenue 1Y (TTM)-10.2%
Revenue growth 3Y26.7%
Revenue growth 5Y16.21%
Sales Q2Q%-24.43%
3.2 Future
KREF is expected to show a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 41.28% yearly.
Based on estimates for the next years, KREF will show a decrease in Revenue. The Revenue will decrease by -5.77% on average per year.
EPS Next Y189.33%
EPS Next 2Y73.32%
EPS Next 3Y41.28%
EPS Next 5YN/A
Revenue Next Year-5.58%
Revenue Next 2Y-2.46%
Revenue Next 3Y-5.77%
Revenue Next 5YN/A
3.3 Evolution
The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
KREF reported negative earnings for the last year, which makes the Price/Earnings Ratio negative.
With a Price/Forward Earnings ratio of 9.98, the valuation of KREF can be described as very reasonable.
KREF's Price/Forward Earnings ratio is in line with the industry average.
The average S&P500 Price/Forward Earnings ratio is at 21.08. KREF is valued rather cheaply when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | N/A | ||
| Fwd PE | 9.98 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, KREF is valued a bit cheaper than 78.46% of the companies in the same industry.
84.62% of the companies in the same industry are more expensive than KREF, based on the Price/Free Cash Flow ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 4.76 | ||
| EV/EBITDA | 147.61 |
4.3 Compensation for Growth
The low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
KREF's earnings are expected to grow with 41.28% in the coming years. This may justify a more expensive valuation.
PEG (NY)N/A
PEG (5Y)N/A
EPS Next 2Y73.32%
EPS Next 3Y41.28%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 11.44%, KREF is a good candidate for dividend investing.
Compared to an average industry Dividend Yield of 15.48, KREF's dividend is way lower than its industry peers. On top of this 81.54% of the companies listed in the same industry pay a better dividend than KREF!
KREF's Dividend Yield is rather good when compared to the S&P500 average which is at 2.57.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 11.44% |
5.2 History
The dividend of KREF decreases each year by -2.88%.
KREF has been paying a dividend for over 5 years, so it has already some track record.
As KREF did not decrease their dividend in the past 5 years, we can say the dividend looks stable.
Dividend Growth(5Y)-2.88%
Div Incr Years0
Div Non Decr Years6
5.3 Sustainability
KREF pays out 788.79% of its income as dividend. This is not a sustainable payout ratio.
DP788.79%
EPS Next 2Y73.32%
EPS Next 3Y41.28%
9.09
+0.01 (+0.11%)
Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupFinancial Services
GICS IndustryMortgage Real Estate Investment Trusts (REITs)"
Earnings (Last)
Earnings (Next)
Inst Owners61.87%
Inst Owner Change-0.19%
Ins Owners1.49%
Ins Owner Change5.46%
Market Cap624.57M
Analysts83.33
Price Target13.41 (47.52%)
Short Float %2.03%
Short Ratio2.59
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 11.44% |
Yearly Dividend1.49
Dividend Growth(5Y)-2.88%
DP788.79%
Div Incr Years0
Div Non Decr Years6
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)-113.58%
Min EPS beat(2)-233.84%
Max EPS beat(2)6.69%
EPS beat(4)3
Avg EPS beat(4)-52.01%
Min EPS beat(4)-233.84%
Max EPS beat(4)11.37%
EPS beat(8)5
Avg EPS beat(8)-67.45%
EPS beat(12)8
Avg EPS beat(12)-48.43%
EPS beat(16)11
Avg EPS beat(16)-43.18%
Revenue beat(2)0
Avg Revenue beat(2)-2.92%
Min Revenue beat(2)-4.19%
Max Revenue beat(2)-1.64%
Revenue beat(4)1
Avg Revenue beat(4)-2.58%
Min Revenue beat(4)-12.15%
Max Revenue beat(4)7.66%
Revenue beat(8)3
Avg Revenue beat(8)25.76%
Revenue beat(12)7
Avg Revenue beat(12)64.57%
Revenue beat(16)11
Avg Revenue beat(16)70.52%
PT rev (1m)0%
PT rev (3m)1.15%
EPS NQ rev (1m)1.69%
EPS NQ rev (3m)-9.09%
EPS NY rev (1m)-1.83%
EPS NY rev (3m)-15.24%
Revenue NQ rev (1m)0.96%
Revenue NQ rev (3m)1.06%
Revenue NY rev (1m)0.94%
Revenue NY rev (3m)2.65%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | N/A | ||
| Fwd PE | 9.98 | ||
| P/S | 1.05 | ||
| P/FCF | 4.76 | ||
| P/OCF | 4.71 | ||
| P/B | 0.46 | ||
| P/tB | 0.46 | ||
| EV/EBITDA | 147.61 |
EPS(TTM)-1.02
EYN/A
EPS(NY)0.91
Fwd EY10.02%
FCF(TTM)1.91
FCFY20.99%
OCF(TTM)1.93
OCFY21.22%
SpS8.65
BVpS19.58
TBVpS19.58
PEG (NY)N/A
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 0.21% | ||
| ROE | 0.97% | ||
| ROCE | 0.58% | ||
| ROIC | 0.45% | ||
| ROICexc | 0.45% | ||
| ROICexgc | 0.47% | ||
| OM | 5.82% | ||
| PM (TTM) | 2.2% | ||
| GM | 30.5% | ||
| FCFM | 22.07% |
ROA(3y)-0.1%
ROA(5y)0.53%
ROE(3y)-0.63%
ROE(5y)2.49%
ROIC(3y)N/A
ROIC(5y)N/A
ROICexc(3y)N/A
ROICexc(5y)N/A
ROICexgc(3y)N/A
ROICexgc(5y)N/A
ROCE(3y)N/A
ROCE(5y)N/A
ROICexcg growth 3Y-34.98%
ROICexcg growth 5Y-19.95%
ROICexc growth 3Y-35.68%
ROICexc growth 5Y-20.67%
OM growth 3Y-50.23%
OM growth 5Y-29.01%
PM growth 3Y-62.88%
PM growth 5Y-41.56%
GM growth 3Y-20.56%
GM growth 5Y-6.79%
F-Score7
Asset Turnover0.09
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 3.51 | ||
| Debt/FCF | 37.36 | ||
| Debt/EBITDA | 132.73 | ||
| Cap/Depr | 148.02% | ||
| Cap/Sales | 0.24% | ||
| Interest Coverage | 0.09 | ||
| Cash Conversion | 372.81% | ||
| Profit Quality | 1003.04% | ||
| Current Ratio | 0.34 | ||
| Quick Ratio | 0.34 | ||
| Altman-Z | 0.05 |
F-Score7
WACC6.79%
ROIC/WACC0.07
Cap/Depr(3y)N/A
Cap/Depr(5y)N/A
Cap/Sales(3y)N/A
Cap/Sales(5y)N/A
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)-221.43%
EPS 3Y-55.99%
EPS 5Y-34.56%
EPS Q2Q%43.24%
EPS Next Y189.33%
EPS Next 2Y73.32%
EPS Next 3Y41.28%
EPS Next 5YN/A
Revenue 1Y (TTM)-10.2%
Revenue growth 3Y26.7%
Revenue growth 5Y16.21%
Sales Q2Q%-24.43%
Revenue Next Year-5.58%
Revenue Next 2Y-2.46%
Revenue Next 3Y-5.77%
Revenue Next 5YN/A
EBIT growth 1Y211.84%
EBIT growth 3Y-36.94%
EBIT growth 5Y-17.51%
EBIT Next Year-10.5%
EBIT Next 3YN/A
EBIT Next 5YN/A
FCF growth 1Y-15.8%
FCF growth 3Y1.66%
FCF growth 5Y7.41%
OCF growth 1Y-14.87%
OCF growth 3Y2.03%
OCF growth 5Y7.65%