Catchmark Timber Trust (NYSE:CTT) and KKR Real Estate Finance Trust (NYSE:KREF) are both small-cap finance companies, but which is the better investment? We will contrast the two businesses based on the strength of their risk, analyst recommendations, profitability, valuation, institutional ownership, earnings and dividends.
Catchmark Timber Trust pays an annual dividend of $0.54 per share and has a dividend yield of 6.4%. KKR Real Estate Finance Trust pays an annual dividend of $1.72 per share and has a dividend yield of 8.5%. Catchmark Timber Trust pays out -158.8% of its earnings in the form of a dividend. KKR Real Estate Finance Trust pays out 141.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.
80.6% of Catchmark Timber Trust shares are owned by institutional investors. Comparatively, 71.8% of KKR Real Estate Finance Trust shares are owned by institutional investors. 1.2% of Catchmark Timber Trust shares are owned by company insiders. Comparatively, 0.9% of KKR Real Estate Finance Trust shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.
This is a summary of recent ratings for Catchmark Timber Trust and KKR Real Estate Finance Trust, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Catchmark Timber Trust||0||0||5||0||3.00|
|KKR Real Estate Finance Trust||0||1||4||0||2.80|
Catchmark Timber Trust presently has a consensus price target of $11.90, indicating a potential upside of 40.50%. KKR Real Estate Finance Trust has a consensus price target of $21.30, indicating a potential upside of 5.45%. Given Catchmark Timber Trust’s stronger consensus rating and higher probable upside, research analysts clearly believe Catchmark Timber Trust is more favorable than KKR Real Estate Finance Trust.
Risk & Volatility
Catchmark Timber Trust has a beta of 0.96, meaning that its stock price is 4% less volatile than the S&P 500. Comparatively, KKR Real Estate Finance Trust has a beta of -0.06, meaning that its stock price is 106% less volatile than the S&P 500.
This table compares Catchmark Timber Trust and KKR Real Estate Finance Trust’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Catchmark Timber Trust||-90.95%||-20.93%||-11.20%|
|KKR Real Estate Finance Trust||56.20%||8.84%||1.61%|
Earnings and Valuation
This table compares Catchmark Timber Trust 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|
|Catchmark Timber Trust||$91.29 million||4.55||-$13.51 million||($0.34)||-24.91|
|KKR Real Estate Finance Trust||$83.14 million||14.22||$59.06 million||$1.22||16.56|
KKR Real Estate Finance Trust has lower revenue, but higher earnings than Catchmark Timber Trust. Catchmark Timber Trust 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.
About Catchmark Timber Trust
CatchMark Timber Trust, Inc. (NYSE: CTT) is a self-administered and self-managed, publicly-traded timberland REIT that strives to deliver superior risk-adjusted returns for all stakeholders through disciplined acquisitions, sustainable harvests, and well-timed real estate sales. Headquartered in Atlanta and focused exclusively on timberland ownership and management, CatchMark began operations in 2007 and owns interests in over 1.6 million acres of timberlands located in Alabama, Florida, Georgia, Louisiana, North Carolina, Oregon, South Carolina, Tennessee and Texas.
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.
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