KKR Real Estate Finance Trust (NYSE:KREF) vs. Equity Lifestyle Properties (NYSE:ELS) Financial Contrast

KKR Real Estate Finance Trust (NYSE:KREF) and Equity Lifestyle Properties (NYSE:ELS) are both finance companies, but which is the better investment? We will compare the two companies based on the strength of their dividends, profitability, institutional ownership, risk, analyst recommendations, earnings and valuation.

Insider & Institutional Ownership

78.2% of KKR Real Estate Finance Trust shares are owned by institutional investors. Comparatively, 94.4% of Equity Lifestyle Properties shares are owned by institutional investors. 0.9% of KKR Real Estate Finance Trust shares are owned by company insiders. Comparatively, 5.1% of Equity Lifestyle Properties shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Dividends

KKR Real Estate Finance Trust pays an annual dividend of $1.72 per share and has a dividend yield of 8.9%. Equity Lifestyle Properties pays an annual dividend of $2.45 per share and has a dividend yield of 2.0%. KKR Real Estate Finance Trust pays out 89.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Equity Lifestyle Properties pays out 63.3% of its earnings in the form of a dividend. Equity Lifestyle Properties has increased its dividend for 8 consecutive years.

Profitability

This table compares KKR Real Estate Finance Trust and Equity Lifestyle Properties’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
KKR Real Estate Finance Trust 35.11% 7.84% 1.79%
Equity Lifestyle Properties 27.02% 22.00% 6.89%

Analyst Recommendations

This is a breakdown of current ratings for KKR Real Estate Finance Trust and Equity Lifestyle Properties, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
KKR Real Estate Finance Trust 0 2 2 0 2.50
Equity Lifestyle Properties 0 4 1 0 2.20

KKR Real Estate Finance Trust presently has a consensus target price of $21.25, indicating a potential upside of 9.54%. Equity Lifestyle Properties has a consensus target price of $106.70, indicating a potential downside of 14.21%. Given KKR Real Estate Finance Trust’s stronger consensus rating and higher possible upside, equities research analysts clearly believe KKR Real Estate Finance Trust is more favorable than Equity Lifestyle Properties.

Risk and Volatility

KKR Real Estate Finance Trust has a beta of 0.18, indicating that its share price is 82% less volatile than the S&P 500. Comparatively, Equity Lifestyle Properties has a beta of 0.26, indicating that its share price is 74% less volatile than the S&P 500.

Earnings and Valuation

This table compares KKR Real Estate Finance Trust and Equity Lifestyle Properties’ revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
KKR Real Estate Finance Trust $183.57 million 6.07 $89.74 million $1.92 10.10
Equity Lifestyle Properties $986.65 million 11.44 $212.61 million $3.87 32.05

Equity Lifestyle Properties 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 Equity Lifestyle Properties, indicating that it is currently the more affordable of the two stocks.

Summary

Equity Lifestyle Properties beats KKR Real Estate Finance Trust on 12 of the 17 factors compared between the two stocks.

About KKR Real Estate Finance Trust

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.

About Equity Lifestyle Properties

We are a self-administered, self-managed real estate investment trust (“REIT”) with headquarters in Chicago. As of January 28, 2019, we own or have an interest in 409 quality properties in 33 states and British Columbia consisting of 153,984 sites.

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