Exploring The Competitive Space: KKR & Co Versus Industry Peers In Capital Markets

In today's rapidly changing and fiercely competitive business landscape, it is essential for investors and industry enthusiasts to thoroughly analyze companies. In this article, we will conduct a comprehensive industry comparison, evaluating KKR & Co 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 & Co Background

KKR is one of the world's largest alternative asset managers, with $518.5 billion in total assets under management, including $420.0 billion in fee-earning AUM, at the end of June 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 October 2020 purchase of a 61.5% economic stake in 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.

When analyzing KKR & Co, the following trends become evident:

• With a Price to Earnings ratio of 35.41, which is 0.65x less than the industry average, the stock shows potential for growth at a reasonable price, making it an interesting consideration for market participants.

• The current Price to Book ratio of 4.21, which is 0.86x the industry average, is substantially lower than the industry average, indicating potential undervaluation.

• With a relatively high Price to Sales ratio of 6.93, which is 1.28x the industry average, the stock might be considered overvalued based on sales performance.

• The Return on Equity (ROE) of 7.5% is 4.33% above the industry average, highlighting efficient use of equity to generate profits.

• The Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $3.59 Billion is 2.49x above the industry average, highlighting stronger profitability and robust cash flow generation.

• Compared to its industry, the company has higher gross profit of $1.63 Billion, which indicates 1.38x 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 79.76%, outperforming the industry average of 2.42%.

Debt To Equity Ratio

The debt-to-equity (D/E) ratio is an important measure to assess the financial structure and risk profile of a company.

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 terms of the Debt-to-Equity ratio, KKR & Co can be assessed by comparing it to its top 4 peers, resulting in the following observations:

• Compared to its top 4 peers, KKR & Co has a moderate debt-to-equity ratio of 2.3, indicating a balanced financial structure.

• This suggests that the company maintains a reasonable level of debt while also leveraging equity financing.

Key Takeaways

KKR & Co has a low PE ratio, indicating that its stock price is relatively low compared to its earnings. The low PB ratio suggests that the stock is undervalued based on its book value. However, the high PS ratio indicates that the stock is trading at a premium compared to its sales. On the other hand, KKR & Co has a high ROE, EBITDA, gross profit, and revenue growth, indicating strong financial performance compared to its peers in the Capital Markets industry.

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