NexPoint Real Estate Finance (NYSE:NREF) vs. KKR Real Estate Finance Trust (NYSE:KREF) Financial Contrast

NexPoint Real Estate Finance (NYSE:NREF) and KKR Real Estate Finance Trust (NYSE:KREF) 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, institutional ownership, dividends, earnings, profitability, valuation and risk.

Dividends

NexPoint Real Estate Finance pays an annual dividend of $2.00 per share and has a dividend yield of 13.2%. KKR Real Estate Finance Trust pays an annual dividend of $1.00 per share and has a dividend yield of 15.5%. NexPoint Real Estate Finance pays out 76.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. KKR Real Estate Finance Trust pays out -53.8% of its earnings in the form of a dividend. KKR Real Estate Finance Trust is clearly the better dividend stock, given its higher yield and lower payout ratio.

Volatility & Risk

NexPoint Real Estate Finance has a beta of 1.12, meaning that its stock price is 12% more volatile than the S&P 500. Comparatively, KKR Real Estate Finance Trust has a beta of 0.81, meaning that its stock price is 19% less volatile than the S&P 500.

Institutional & Insider Ownership

67.8% of NexPoint Real Estate Finance shares are held by institutional investors. Comparatively, 70.2% of KKR Real Estate Finance Trust shares are held by institutional investors. 55.7% of NexPoint Real Estate Finance shares are held by insiders. Comparatively, 2.1% of KKR Real Estate Finance Trust shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Analyst Ratings

This is a summary of recent ratings and price targets for NexPoint Real Estate Finance and KKR Real Estate Finance Trust, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
NexPoint Real Estate Finance	1	3	0	0	1.75
KKR Real Estate Finance Trust	2	5	1	0	1.88

NexPoint Real Estate Finance currently has a consensus target price of $14.50, suggesting a potential downside of 4.41%. KKR Real Estate Finance Trust has a consensus target price of $8.40, suggesting a potential upside of 30.54%. Given KKR Real Estate Finance Trust’s stronger consensus rating and higher possible upside, analysts plainly believe KKR Real Estate Finance Trust is more favorable than NexPoint Real Estate Finance.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
NexPoint Real Estate Finance	117.74%	13.14%	0.93%
KKR Real Estate Finance Trust	-23.55%	-0.78%	-0.14%

Earnings and Valuation

This table compares NexPoint Real Estate Finance and KKR Real Estate Finance Trust”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
NexPoint Real Estate Finance	$89.95 million	3.18	$105.10 million	$2.62	5.79
KKR Real Estate Finance Trust	$435.60 million	0.95	-$47.05 million	($1.86)	-3.46

NexPoint Real Estate Finance has higher earnings, but lower revenue than KKR Real Estate Finance Trust. KKR Real Estate Finance Trust is trading at a lower price-to-earnings ratio than NexPoint Real Estate Finance, indicating that it is currently the more affordable of the two stocks.

Summary

NexPoint Real Estate Finance beats KKR Real Estate Finance Trust on 9 of the 16 factors compared between the two stocks.

About NexPoint Real Estate Finance

NexPoint Real Estate Finance, Inc. operates as a commercial mortgage real estate investment trust in the United States. It focuses on originating, structuring, and investing in first-lien mortgage loans, mezzanine loans, preferred equity, convertible notes, multifamily properties, and common equity investments, as well as multifamily and single-family rental commercial mortgage-backed securities securitizations, multifamily structured credit risk notes, and mortgage-backed securities or target assets. The company has elected to be taxed as a real estate investment trust (REIT) and would not be subject to federal corporate income taxes if it distributes at least 90% of its taxable income to its stockholders. NexPoint Real Estate Finance, Inc. was incorporated in 2019 and is based in Dallas, Texas.

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.