KKR Real Estate Finance Trust (NYSE:KREF – Get Free Report) and Apartment Investment and Management (NYSE:AIV – Get Free Report) are both small-cap finance companies, but which is the better investment? We will contrast the two businesses based on the strength of their valuation, risk, earnings, dividends, analyst recommendations, institutional ownership and profitability.
Insider & Institutional Ownership
70.2% of KKR Real Estate Finance Trust shares are owned by institutional investors. Comparatively, 83.3% of Apartment Investment and Management shares are owned by institutional investors. 1.9% of KKR Real Estate Finance Trust shares are owned by company insiders. Comparatively, 3.0% of Apartment Investment and Management shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.
Analyst Ratings
This is a summary of current ratings and recommmendations for KKR Real Estate Finance Trust and Apartment Investment and Management, as reported 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 |
| Apartment Investment and Management | 0 | 0 | 0 | 0 | 0.00 |
Dividends
KKR Real Estate Finance Trust pays an annual dividend of $1.00 per share and has a dividend yield of 9.3%. Apartment Investment and Management pays an annual dividend of $1.01 per share and has a dividend yield of 11.5%. KKR Real Estate Finance Trust pays out 555.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Apartment Investment and Management pays out -136.5% of its earnings in the form of a dividend. Apartment Investment and Management is clearly the better dividend stock, given its higher yield and lower payout ratio.
Earnings and Valuation
This table compares KKR Real Estate Finance Trust and Apartment Investment and Management”s revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| KKR Real Estate Finance Trust | $155.17 million | 4.78 | $35.59 million | $0.18 | 60.03 |
| Apartment Investment and Management | $208.68 million | 5.99 | -$166.20 million | ($0.74) | -11.90 |
KKR Real Estate Finance Trust has higher earnings, but lower revenue than Apartment Investment and Management. Apartment Investment and Management is trading at a lower price-to-earnings ratio than KKR Real Estate Finance Trust, indicating that it is currently the more affordable of the two stocks.
Risk & Volatility
KKR Real Estate Finance Trust has a beta of 0.99, meaning that its share price is 1% less volatile than the S&P 500. Comparatively, Apartment Investment and Management has a beta of 1.4, meaning that its share price is 40% more volatile than the S&P 500.
Profitability
This table compares KKR Real Estate Finance Trust and Apartment Investment and Management’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| KKR Real Estate Finance Trust | 6.30% | 8.53% | 1.75% |
| Apartment Investment and Management | -119.76% | -68.04% | -11.72% |
Summary
KKR Real Estate Finance Trust beats Apartment Investment and Management on 9 of the 16 factors compared between the two stocks.
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 Apartment Investment and Management
Apartment Investment & Management Co. operates as a real estate investment trust that engages in the acquisition, ownership, management and redevelopment of apartment properties. The company was founded in 1975 and is headquartered in Denver, CO.
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