KKR Real Estate Finance Trust (NYSE:KREF) versus BrightSpire Capital (NYSE:BRSP) Financial Contrast

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

Risk and Volatility

KKR Real Estate Finance Trust has a beta of 1, suggesting that its stock price has a similar volatility profile to the S&P 500.Comparatively, BrightSpire Capital has a beta of 1.88, suggesting that its stock price is 88% more volatile than the S&P 500.

Institutional and Insider Ownership

70.2% of KKR Real Estate Finance Trust shares are held by institutional investors. Comparatively, 56.6% of BrightSpire Capital shares are held by institutional investors. 1.2% of KKR Real Estate Finance Trust shares are held by insiders. Comparatively, 1.9% of BrightSpire Capital shares are held by 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.

Valuation & Earnings

This table compares KKR Real Estate Finance Trust and BrightSpire Capital”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
KKR Real Estate Finance Trust	$164.97 million	4.23	-$30.85 million	($0.30)	-33.43
BrightSpire Capital	$364.80 million	2.02	-$15.55 million	($1.02)	-5.57

BrightSpire 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 BrightSpire Capital, indicating that it is currently the more affordable of the two stocks.

Dividends

KKR Real Estate Finance Trust pays an annual dividend of $1.00 per share and has a dividend yield of 10.0%. BrightSpire Capital pays an annual dividend of $0.64 per share and has a dividend yield of 11.3%. KKR Real Estate Finance Trust pays out -333.3% of its earnings in the form of a dividend. BrightSpire Capital pays out -62.7% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years.

Analyst Ratings

This is a breakdown of current ratings and price targets for KKR Real Estate Finance Trust and BrightSpire Capital, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
KKR Real Estate Finance Trust	0	0	6	0	3.00
BrightSpire Capital	1	3	2	0	2.17

KKR Real Estate Finance Trust presently has a consensus target price of $12.75, indicating a potential upside of 27.12%. BrightSpire Capital has a consensus target price of $7.50, indicating a potential upside of 32.04%. Given BrightSpire Capital’s higher possible upside, analysts clearly believe BrightSpire Capital is more favorable than KKR Real Estate Finance Trust.

Profitability

This table compares KKR Real Estate Finance Trust and BrightSpire Capital’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
KKR Real Estate Finance Trust	0.40%	9.46%	1.86%
BrightSpire Capital	-69.35%	9.44%	2.79%

About KKR Real Estate Finance Trust

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.

About BrightSpire Capital

BrightSpire Capital, Inc. operates as a commercial real estate (CRE) credit real estate investment trust in the United States and Europe. The company operates through Senior and Mezzanine Loans and Preferred Equity; Net Leased and Other Real Estate; and Corporate and Other segments. It focuses on originating, acquiring, financing, and managing a diversified portfolio of CRE debt investments consisting of first mortgage loans, senior loans, debt securities, mezzanine loans, and preferred equity investments, as well as net leased properties. 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 formerly known as Colony Credit Real Estate, Inc. and changed its name to BrightSpire Capital, Inc. in June 2021. BrightSpire Capital, Inc. was incorporated in 2017 and is headquartered in New York, New York.