Investigating KKR's Standing In Capital Markets Industry Compared To Competitors

In today's fast-paced and competitive business landscape, it is essential for investors and industry enthusiasts to thoroughly analyze companies before making investment decisions. In this article, we will conduct a comprehensive industry comparison, evaluating KKR KKR against its key competitors in the Capital Markets industry. By examining key financial metrics, market position, and growth prospects, we aim to provide valuable insights for investors and shed light on company's performance within the industry.

KKR Background

KKR & Co Inc is one of the world's largest alternative asset managers, with $552.8 billion in total managed assets, including $446.4 billion in fee-earning AUM, at the end of 2023. The company has two core segments: asset management (which includes private markets—private equity, credit, infrastructure, energy, and real estate—and public markets—primarily credit and hedge/investment fund platforms) and insurance (following the firm's initial investment in, and then ultimate purchase of, Global Atlantic Financial Group, which is engaged in retirement/annuity and life insurance lines as well as reinsurance). On the asset management side, private markets account for 50% of fee-earning AUM and 70% of base management fees, while public markets account for 50% and 30%, respectively.

Company P/E P/B P/S ROE EBITDA (in billions) Gross Profit (in billions) Revenue Growth
KKR & Co Inc 24.52 3.88 6.38 4.81% $2.68 $1.12 75.7%
BlackRock Inc 22.02 3.04 6.78 3.53% $2.12 $2.31 6.78%
Brookfield Corp 67.39 1.49 0.68 1.6% $9.69 $3.92 1.26%
T. Rowe Price Group Inc 15.42 2.82 4.16 4.51% $0.72 $0.76 7.73%
Ares Management Corp 55.29 13.66 5.25 10.47% $0.73 $1.1 25.09%
Franklin Resources Inc 14.49 1.21 1.71 2.02% $0.46 $1.22 1.22%
SEI Investments Co 20.49 4.37 4.94 5.73% $0.17 $0.24 6.19%
Blue Owl Capital Inc 193.40 5.89 5.34 1.18% $0.18 $0.24 24.91%
Affiliated Managers Group Inc 9.73 1.55 3.48 5.54% $0.32 $0.26 -6.87%
Janus Henderson Group PLC 14 1.18 2.53 2.87% $0.19 $0.41 10.35%
Hamilton Lane Inc 35.83 10.07 12.80 4.19% $0.06 $0.08 -1.42%
Cohen & Steers Inc 29.35 9.91 7.72 7.97% $0.04 $0.06 -4.9%
Average 43.4 5.02 5.04 4.51% $1.33 $0.96 6.39%

After thoroughly examining KKR, the following trends can be inferred:

  • The stock's Price to Earnings ratio of 24.52 is lower than the industry average by 0.56x, suggesting potential value in the eyes of market participants.

  • The current Price to Book ratio of 3.88, which is 0.77x the industry average, is substantially lower than the industry average, indicating potential undervaluation.

  • The stock's relatively high Price to Sales ratio of 6.38, surpassing the industry average by 1.27x, may indicate an aspect of overvaluation in terms of sales performance.

  • The Return on Equity (ROE) of 4.81% is 0.3% above the industry average, highlighting efficient use of equity to generate profits.

  • With higher Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $2.68 Billion, which is 2.02x above the industry average, the company demonstrates stronger profitability and robust cash flow generation.

  • Compared to its industry, the company has higher gross profit of $1.12 Billion, which indicates 1.17x above the industry average, indicating stronger profitability and higher earnings from its core operations.

  • With a revenue growth of 75.7%, which surpasses the industry average of 6.39%, the company is demonstrating robust sales expansion and gaining market share.

Debt To Equity Ratio

The debt-to-equity (D/E) ratio assesses the extent to which a company relies on borrowed funds compared to its equity.

Considering the debt-to-equity ratio in industry comparisons allows for a concise evaluation of a company's financial health and risk profile, aiding in informed decision-making.

When examining KKR in comparison to its top 4 peers with respect to the Debt-to-Equity ratio, the following information becomes apparent:

  • In terms of the debt-to-equity ratio, KKR is positioned in the middle among its top 4 peers.

  • This suggests a relatively balanced financial structure, where the company maintains a moderate level of debt while also utilizing equity financing with a debt-to-equity ratio of 2.16.

Key Takeaways

For KKR in the Capital Markets industry, the PE and PB ratios are low compared to peers, indicating potential undervaluation. However, the PS ratio is high, suggesting rich valuation based on revenue. On the other hand, KKR's high ROE, EBITDA, gross profit, and revenue growth outperform industry peers, reflecting strong operational performance and growth potential.

This article was generated by Benzinga's automated content engine and reviewed by an editor.

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