Highlands REIT (OTCMKTS:HHDS – Get Free Report) and KKR Real Estate Finance Trust (NYSE:KREF – Get Free Report) are both small-cap finance companies, but which is the better business? We will compare the two companies based on the strength of their analyst recommendations, institutional ownership, risk, profitability, valuation, dividends and earnings.
Volatility and Risk
Highlands REIT has a beta of 26.66, indicating that its stock price is 2,566% more volatile than the S&P 500. Comparatively, KKR Real Estate Finance Trust has a beta of 0.96, indicating that its stock price is 4% less volatile than the S&P 500.
Institutional & Insider Ownership
0.0% of Highlands REIT shares are owned by institutional investors. Comparatively, 70.2% of KKR Real Estate Finance Trust shares are owned by institutional investors. 3.7% of Highlands REIT shares are owned by company insiders. Comparatively, 1.2% of KKR Real Estate Finance Trust shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.
Analyst Recommendations
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Highlands REIT | 0 | 0 | 0 | 0 | N/A |
| KKR Real Estate Finance Trust | 0 | 2 | 4 | 0 | 2.67 |
KKR Real Estate Finance Trust has a consensus target price of $11.96, suggesting a potential upside of 24.43%. Given KKR Real Estate Finance Trust’s higher possible upside, analysts plainly believe KKR Real Estate Finance Trust is more favorable than Highlands REIT.
Valuation and Earnings
This table compares Highlands REIT 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 | |
| Highlands REIT | $30.98 million | 2.33 | -$10.30 million | ($0.01) | -10.00 |
| KKR Real Estate Finance Trust | $640.41 million | 1.04 | -$30.85 million | ($0.46) | -20.90 |
Highlands REIT 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 Highlands REIT, indicating that it is currently the more affordable of the two stocks.
Profitability
This table compares Highlands REIT and KKR Real Estate Finance Trust’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Highlands REIT | -33.24% | -4.51% | -3.04% |
| KKR Real Estate Finance Trust | -1.39% | 10.38% | 1.97% |
Summary
KKR Real Estate Finance Trust beats Highlands REIT on 7 of the 13 factors compared between the two stocks.
About Highlands REIT
We are a self-advised and self-administered real estate investment trust (REIT) created to own and manage substantially all of the non-core investment properties previously owned and managed by our former parent, InvenTrust Properties Corp., a Maryland corporation (InvenTrust). On April 28, 2016, we were spun-off from InvenTrust through a pro rata distribution (the Distribution) by InvenTrust of 100% of the outstanding shares of our common stock to holders of InvenTrust's common stock. Prior to or concurrent with the separation, we and InvenTrust engaged in certain reorganization transactions that were designed to consolidate substantially all of InvenTrust's remaining non-core investment properties in Highlands.
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.
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