Analyzing Sunrise Realty Trust (NASDAQ:SUNS) & KKR Real Estate Finance Trust (NYSE:KREF)

KKR Real Estate Finance Trust (NYSE:KREF) and Sunrise Realty Trust (NASDAQ:SUNS) are both small-cap finance companies, but which is the better investment? We will compare the two businesses based on the strength of their profitability, earnings, analyst recommendations, valuation, institutional ownership, dividends and risk.

Valuation and Earnings

This table compares KKR Real Estate Finance Trust and Sunrise Realty Trust”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
KKR Real Estate Finance Trust	$435.60 million	1.04	-$47.05 million	($3.28)	-2.35
Sunrise Realty Trust	$21.57 million	4.69	$12.14 million	$0.97	7.72

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

Volatility and Risk

KKR Real Estate Finance Trust has a beta of 0.82, indicating that its stock price is 18% less volatile than the S&P 500. Comparatively, Sunrise Realty Trust has a beta of 1.02, indicating that its stock price is 2% more volatile than the S&P 500.

Profitability

This table compares KKR Real Estate Finance Trust and Sunrise Realty Trust’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
KKR Real Estate Finance Trust	-47.33%	-1.53%	-0.27%
Sunrise Realty Trust	53.33%	8.24%	5.03%

Analyst Ratings

This is a summary of current ratings and target prices for KKR Real Estate Finance Trust and Sunrise Realty Trust, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
KKR Real Estate Finance Trust	2	5	1	1	2.11
Sunrise Realty Trust	1	2	0	0	1.67

KKR Real Estate Finance Trust currently has a consensus price target of $8.92, indicating a potential upside of 15.70%. Sunrise Realty Trust has a consensus price target of $8.00, indicating a potential upside of 6.82%. Given KKR Real Estate Finance Trust’s stronger consensus rating and higher possible upside, equities analysts clearly believe KKR Real Estate Finance Trust is more favorable than Sunrise Realty Trust.

Dividends

KKR Real Estate Finance Trust pays an annual dividend of $0.40 per share and has a dividend yield of 5.2%. Sunrise Realty Trust pays an annual dividend of $1.20 per share and has a dividend yield of 16.0%. KKR Real Estate Finance Trust pays out -12.2% of its earnings in the form of a dividend. Sunrise Realty Trust pays out 123.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Insider & Institutional Ownership

70.2% of KKR Real Estate Finance Trust shares are held by institutional investors. 2.1% of KKR Real Estate Finance Trust shares are held by company insiders. Comparatively, 28.5% of Sunrise Realty Trust shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Summary

Sunrise Realty Trust beats KKR Real Estate Finance Trust on 10 of the 17 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 Sunrise Realty Trust

Sunrise Realty Trust, Inc. engages in commercial real estate (CRE) lending business. It focuses on originating CRE debt investments and providing capital to borrowers and sponsors with transitional business plans collateralized by CRE assets. The company intends to create a diversified investment portfolio, targeting investments in senior mortgage loans, mezzanine loans, whole loans, B-notes, CMBS, and debt-like preferred equity securities across CRE asset classes. Sunrise Realty Trust, Inc. was incorporated in 2023 and is based in West Palm Beach, Florida.