Reviewing Angel Oak Mortgage REIT (NYSE:AOMR) and KKR Real Estate Finance Trust (NYSE:KREF)

KKR Real Estate Finance Trust (NYSE:KREF) and Angel Oak Mortgage REIT (NYSE:AOMR) are both small-cap finance companies, but which is the superior stock? We will compare the two businesses based on the strength of their institutional ownership, analyst recommendations, profitability, risk, earnings, dividends and valuation.

Volatility & Risk

KKR Real Estate Finance Trust has a beta of 0.89, meaning that its share price is 11% less volatile than the S&P 500. Comparatively, Angel Oak Mortgage REIT has a beta of 1.36, meaning that its share price is 36% more volatile than the S&P 500.

Valuation and Earnings

This table compares KKR Real Estate Finance Trust and Angel Oak Mortgage REIT”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
KKR Real Estate Finance Trust	$564.63 million	1.01	$35.59 million	($0.66)	-13.10
Angel Oak Mortgage REIT	$110.43 million	2.01	$28.75 million	$1.54	6.06

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

Profitability

This table compares KKR Real Estate Finance Trust and Angel Oak Mortgage REIT’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
KKR Real Estate Finance Trust	-4.43%	1.61%	0.33%
Angel Oak Mortgage REIT	29.42%	4.78%	0.49%

Institutional & Insider Ownership

70.2% of KKR Real Estate Finance Trust shares are owned by institutional investors. Comparatively, 80.2% of Angel Oak Mortgage REIT shares are owned by institutional investors. 1.9% of KKR Real Estate Finance Trust shares are owned by insiders. Comparatively, 2.5% of Angel Oak Mortgage REIT shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Dividends

KKR Real Estate Finance Trust pays an annual dividend of $1.00 per share and has a dividend yield of 11.6%. Angel Oak Mortgage REIT pays an annual dividend of $1.28 per share and has a dividend yield of 13.7%. KKR Real Estate Finance Trust pays out -151.5% of its earnings in the form of a dividend. Angel Oak Mortgage REIT pays out 83.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Analyst Recommendations

This is a breakdown of recent ratings and target prices for KKR Real Estate Finance Trust and Angel Oak Mortgage REIT, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
KKR Real Estate Finance Trust	1	2	3	0	2.33
Angel Oak Mortgage REIT	0	3	4	0	2.57

KKR Real Estate Finance Trust presently has a consensus target price of $11.44, indicating a potential upside of 32.30%. Angel Oak Mortgage REIT has a consensus target price of $11.60, indicating a potential upside of 24.26%. Given KKR Real Estate Finance Trust’s higher possible upside, equities analysts clearly believe KKR Real Estate Finance Trust is more favorable than Angel Oak Mortgage REIT.

Summary

Angel Oak Mortgage REIT beats KKR Real Estate Finance Trust on 12 of the 16 factors compared between the two stocks.

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.

About Angel Oak Mortgage REIT

Angel Oak Mortgage REIT, Inc., a real estate finance company, focuses on acquiring and investing in first lien non- qualified mortgage loans and other mortgage-related assets in the United States mortgage market. It offers investment securities; residential mortgage loans; and commercial mortgage loans. 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 incorporated in 2018 and is headquartered in Atlanta, Georgia.