Assessing KKR's Performance Against Competitors In Capital Markets Industry

In the ever-changing and fiercely competitive business landscape, conducting thorough company analysis is crucial for investors and industry experts. In this article, we will undertake a comprehensive industry comparison, evaluating KKR KKR and its primary competitors in the Capital Markets industry. By closely examining key financial metrics, market position, and growth prospects, our aim is 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 22.14 4.11 4.36 4.81% $2.17 $1.08 75.7%
Brookfield Corp 71.69 1.59 0.72 1.6% $9.69 $3.92 1.26%
T. Rowe Price Group Inc 13.21 2.54 3.74 5.79% $0.68 $0.88 13.83%
Franklin Resources Inc 13.47 0.95 1.43 0.94% $0.38 $1.7 11.71%
Blue Owl Capital Inc 151 5.51 4.67 1.58% $0.21 $0.29 31.29%
SEI Investments Co 18.66 3.97 4.63 5.99% $0.19 $0.26 9.05%
Janus Henderson Group PLC 12.46 1.20 2.45 2.84% $0.18 $0.37 11.27%
Affiliated Managers Group Inc 8.58 1.41 3.23 4.17% $0.29 $0.26 -0.54%
Hamilton Lane Inc 36.17 10.17 12.92 4.19% $0.06 $0.08 -1.42%
Cohen & Steers Inc 27.65 9.48 7.03 8.95% $0.05 $0.06 -2.06%
Average 39.21 4.09 4.54 4.01% $1.3 $0.87 8.27%

By closely examining KKR, we can identify the following trends:

  • At 22.14, the stock's Price to Earnings ratio is 0.56x less than the industry average, suggesting favorable growth potential.

  • It could be trading at a premium in relation to its book value, as indicated by its Price to Book ratio of 4.11 which exceeds the industry average by 1.0x.

  • With a relatively low Price to Sales ratio of 4.36, which is 0.96x the industry average, the stock might be considered undervalued based on sales performance.

  • The Return on Equity (ROE) of 4.81% is 0.8% above the industry average, highlighting efficient use of equity to generate profits.

  • Compared to its industry, the company has higher Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $2.17 Billion, which is 1.67x above the industry average, indicating stronger profitability and robust cash flow generation.

  • The company has higher gross profit of $1.08 Billion, which indicates 1.24x above the industry average, indicating stronger profitability and higher earnings from its core operations.

  • The company is experiencing remarkable revenue growth, with a rate of 75.7%, outperforming the industry average of 8.27%.

Debt To Equity Ratio

The debt-to-equity (D/E) ratio measures the financial leverage of a company by evaluating its debt relative 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.

In light of the Debt-to-Equity ratio, a comparison between KKR and its top 4 peers reveals the following information:

  • 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 ratio is low compared to peers, indicating potential undervaluation. The high PB ratio suggests the market values KKR's assets highly. The low PS ratio implies KKR's sales are relatively cheap. KKR's high ROE, EBITDA, gross profit, and revenue growth indicate strong financial performance compared to industry peers.

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

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