Financial Contrast: Seven Hills Realty Trust (NASDAQ:SEVN) and KKR Real Estate Finance Trust (NYSE:KREF)

Seven Hills Realty Trust (NASDAQ:SEVN) and KKR Real Estate Finance Trust (NYSE:KREF) are both real estate companies, but which is the better business? We will compare the two companies based on the strength of their dividends, valuation, earnings, analyst recommendations, profitability, institutional ownership and risk.

Institutional & Insider Ownership

70.2% of KKR Real Estate Finance Trust shares are owned by institutional investors. 1.2% of KKR Real Estate Finance Trust shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Dividends

Seven Hills Realty Trust pays an annual dividend of $1.05 per share and has a dividend yield of 8.3%. KKR Real Estate Finance Trust pays an annual dividend of $1.00 per share and has a dividend yield of 8.6%. Seven Hills Realty Trust pays out 72.0% of its earnings in the form of a dividend. KKR Real Estate Finance Trust pays out -217.4% 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. KKR Real Estate Finance Trust is clearly the better dividend stock, given its higher yield and lower payout ratio.

Profitability

This table compares Seven Hills Realty 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
Seven Hills Realty Trust	N/A	N/A	N/A
KKR Real Estate Finance Trust	0.40%	9.46%	1.86%

Analyst Recommendations

This is a breakdown of current recommendations and price targets for Seven Hills Realty Trust and KKR Real Estate Finance Trust, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Seven Hills Realty Trust	0	0	3	0	3.00
KKR Real Estate Finance Trust	0	0	6	0	3.00

Seven Hills Realty Trust presently has a consensus price target of $14.67, suggesting a potential upside of 16.22%. KKR Real Estate Finance Trust has a consensus price target of $12.83, suggesting a potential upside of 10.73%. Given Seven Hills Realty Trust’s higher possible upside, analysts plainly believe Seven Hills Realty Trust is more favorable than KKR Real Estate Finance Trust.

Valuation & Earnings

This table compares Seven Hills Realty Trust and KKR Real Estate Finance Trust”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Seven Hills Realty Trust	$32.06 million	N/A	N/A	$1.46	8.65
KKR Real Estate Finance Trust	$164.97 million	4.87	-$30.85 million	($0.46)	-25.20

Seven Hills Realty Trust 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 Seven Hills Realty Trust, indicating that it is currently the more affordable of the two stocks.

Summary

KKR Real Estate Finance Trust beats Seven Hills Realty Trust on 9 of the 12 factors compared between the two stocks.

About Seven Hills Realty Trust

Seven Hills Realty Trust, a real estate investment trust, focuses on originating and investing in first mortgage loans secured by middle market and transitional commercial real estate in the United States. The company has elected to be taxed as a real estate investment trust. As a result, it would not be subject to corporate income tax on that portion of its net income that is distributed to shareholders. The company was formerly known as RMR Mortgage Trust. Seven Hills Realty Trust was incorporated in 2008 and is headquartered in Newton, Massachusetts.

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.