Understanding KKR's Position In Capital Markets Industry Compared To Competitors

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 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.

By conducting an in-depth analysis of KKR, we can identify the following trends:

• With a Price to Earnings ratio of 24.64, which is 0.58x 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 3.9, which is 0.8x the industry average, is substantially lower than the industry average, indicating potential undervaluation.

• The Price to Sales ratio of 6.41, which is 1.31x the industry average, suggests the stock could potentially be overvalued in relation to its sales performance compared to its peers.

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

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

• 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 gauges the extent to which a company has financed its operations through debt relative to 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 assessing KKR against its top 4 peers using the Debt-to-Equity ratio, the following comparisons can be made:

• When evaluating the debt-to-equity ratio, KKR is in the middle position among its top 4 peers.

• The company maintains a moderate level of debt relative to its equity with a debt-to-equity ratio of 2.16, suggesting a relatively balanced financial structure.

Key Takeaways

For KKR in the Capital Markets industry, the PE and PB ratios suggest the stock is undervalued compared to peers, while the PS ratio indicates overvaluation. KKR's high ROE, EBITDA, gross profit, and revenue growth outperform industry standards, reflecting strong financial performance and growth potential.

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