Financial Contrast: KKR Real Estate Finance Trust (NYSE:KREF) vs. Broadstone Net Lease (NYSE:BNL)

Broadstone Net Lease (NYSE:BNL) and KKR Real Estate Finance Trust (NYSE:KREF) are both real estate companies, but which is the superior investment? We will contrast the two businesses based on the strength of their dividends, risk, earnings, institutional ownership, profitability, valuation and analyst recommendations.

Analyst Ratings

This is a summary of recent ratings and recommmendations for Broadstone Net Lease and KKR Real Estate Finance Trust, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Broadstone Net Lease	1	3	2	0	2.17
KKR Real Estate Finance Trust	0	1	6	0	2.86

Broadstone Net Lease currently has a consensus price target of $18.00, indicating a potential downside of 3.64%. KKR Real Estate Finance Trust has a consensus price target of $12.14, indicating a potential upside of 0.69%. Given KKR Real Estate Finance Trust’s stronger consensus rating and higher probable upside, analysts clearly believe KKR Real Estate Finance Trust is more favorable than Broadstone Net Lease.

Institutional and Insider Ownership

89.1% of Broadstone Net Lease shares are held by institutional investors. Comparatively, 70.2% of KKR Real Estate Finance Trust shares are held by institutional investors. 0.6% of Broadstone Net Lease shares are held by company insiders. Comparatively, 1.2% of KKR Real Estate Finance Trust shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Volatility and Risk

Broadstone Net Lease has a beta of 1.11, indicating that its share price is 11% more volatile than the S&P 500. Comparatively, KKR Real Estate Finance Trust has a beta of 0.99, indicating that its share price is 1% less volatile than the S&P 500.

Earnings and Valuation

This table compares Broadstone Net Lease and KKR Real Estate Finance Trust”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Broadstone Net Lease	$425.82 million	8.27	$155.48 million	$0.96	19.46
KKR Real Estate Finance Trust	$166.66 million	5.02	-$30.85 million	($0.46)	-26.22

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Broadstone Net Lease	36.78%	4.86%	2.96%
KKR Real Estate Finance Trust	5.88%	9.88%	1.90%

Dividends

Broadstone Net Lease pays an annual dividend of $1.16 per share and has a dividend yield of 6.2%. KKR Real Estate Finance Trust pays an annual dividend of $1.00 per share and has a dividend yield of 8.3%. Broadstone Net Lease pays out 120.8% 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 -217.4% 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.

Summary

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

About Broadstone Net Lease

Broadstone Net Lease, Inc. (the Corporation) is a Maryland corporation formed on October 18, 2007, that elected to be taxed as a real estate investment trust (REIT) commencing with the taxable year ended December 31, 2008. Broadstone Net Lease, LLC (the Corporation’s operating company, or the OP), is the entity through which the Corporation conducts its business and owns (either directly or through subsidiaries) all of the Corporation’s properties. The Corporation is the sole managing member of the OP. The membership units not owned by the Corporation are referred to as OP Units or non-controlling interests. As the Corporation conducts substantially all of its operations through the OP, it is structured as what is referred to as an umbrella partnership real estate investment trust (UPREIT). The Corporation’s common stock is listed on the New York Stock Exchange under the symbol BNL.

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.