Contrasting Kilroy Realty (NYSE:KRC) and Rithm Capital (NYSE:RITM)

Kilroy Realty (NYSE:KRC) and Rithm Capital (NYSE:RITM) are both mid-cap finance companies, but which is the better stock? We will contrast the two businesses based on the strength of their analyst recommendations, risk, earnings, profitability, valuation, dividends and institutional ownership.

Dividends

Kilroy Realty pays an annual dividend of $2.16 per share and has a dividend yield of 5.2%. Rithm Capital pays an annual dividend of $1.00 per share and has a dividend yield of 9.5%. Kilroy Realty pays out 128.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Rithm Capital pays out 84.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Rithm Capital is clearly the better dividend stock, given its higher yield and lower payout ratio.

Risk and Volatility

Kilroy Realty has a beta of 1.04, suggesting that its stock price is 4% more volatile than the S&P 500. Comparatively, Rithm Capital has a beta of 1.8, suggesting that its stock price is 80% more volatile than the S&P 500.

Analyst Ratings

This is a summary of current ratings and target prices for Kilroy Realty and Rithm Capital, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Kilroy Realty	0	6	2	0	2.25
Rithm Capital	0	1	8	0	2.89

Kilroy Realty presently has a consensus price target of $38.43, indicating a potential downside of 7.22%. Rithm Capital has a consensus price target of $12.67, indicating a potential upside of 20.87%. Given Rithm Capital’s stronger consensus rating and higher probable upside, analysts plainly believe Rithm Capital is more favorable than Kilroy Realty.

Earnings and Valuation

This table compares Kilroy Realty and Rithm Capital”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Kilroy Realty	$1.13 billion	4.30	$212.24 million	$1.68	24.65
Rithm Capital	$3.80 billion	1.33	$622.26 million	$1.19	8.81

Rithm Capital has higher revenue and earnings than Kilroy Realty. Rithm Capital is trading at a lower price-to-earnings ratio than Kilroy Realty, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Kilroy Realty and Rithm Capital’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Kilroy Realty	17.91%	3.52%	1.73%
Rithm Capital	15.55%	18.04%	2.63%

Insider & Institutional Ownership

94.2% of Kilroy Realty shares are owned by institutional investors. Comparatively, 44.9% of Rithm Capital shares are owned by institutional investors. 2.5% of Kilroy Realty shares are owned by insiders. Comparatively, 0.4% of Rithm Capital shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Summary

Rithm Capital beats Kilroy Realty on 10 of the 16 factors compared between the two stocks.

About Kilroy Realty

Kilroy Realty Corporation (NYSE: KRC, the company, Kilroy) is a leading U.S. landlord and developer, with operations in San Diego, Greater Los Angeles, the San Francisco Bay Area, Greater Seattle and Austin. The company has earned global recognition for sustainability, building operations, innovation and design. As a pioneer and innovator in the creation of a more sustainable real estate industry, the company's approach to modern business environments helps drive creativity and productivity for some of the world's leading technology, entertainment, life science and business services companies. The company is a publicly traded real estate investment trust (REIT) and member of the S&P MidCap 400 Index with more than seven decades of experience developing, acquiring and managing office, life science and mixed-use projects. As of December 31, 2023, Kilroy's stabilized portfolio totaled approximately 17.0 million square feet of primarily office and life science space that was 85.0% occupied and 86.4% leased. The company also had approximately 1,000 residential units in Hollywood and San Diego, which had a quarterly average occupancy of 92.5%. In addition, the company had two in-process life science redevelopment projects totaling approximately 100,000 square feet with total estimated redevelopment costs of $80.0 million and one approximately 875,000 square foot in-process development project with a total estimated investment of $1.0 billion.

About Rithm Capital

Rithm Capital Corp. operates as an asset manager focused on real estate, credit, and financial services. It operates through Origination and Servicing, Investment Portfolio, Mortgage Loans Receivable, and Asset Management segments. Its investment portfolio primarily comprises of mortgage servicing rights (MSR), and MSR financing receivables, title, appraisal and property preservation, excess MSRs, and services advance investments; real estate securities, call rights, SFR properties, and residential mortgage loans; consumer and business purpose loans; and asset management related investments. 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 New Residential Investment Corp. and changed its name to Rithm Capital Corp. in August 2022. Rithm Capital Corp. was incorporated in 2011 and is based in New York, New York.