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Yacktman defines forward rate of return as the normalized free cash flow yield plus real growth plus inflation. KKR Real Estate Finance Trust's forward rate of return for was 18.59%.
The historical rank and industry rank for KKR Real Estate Finance Trust's Forward Rate of Return (Yacktman) % or its related term are showing as below:
During the past 9 years, KKR Real Estate Finance Trust's highest Forward Rate of Return was 24.59. The lowest was 11.67. And the median was 18.11.
Unlike the Earnings Yield %, the Forward Rate of Return uses the normalized Free Cash Flow of the past seven years, and considers growth. The forward rate of return can be thought of as the return that investors buying the stock today can expect from it in the future.
The historical data trend for KKR Real Estate Finance Trust's Forward Rate of Return (Yacktman) % can be seen below:
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
For the REIT - Mortgage subindustry, KKR Real Estate Finance Trust's Forward Rate of Return (Yacktman) %, along with its competitors' market caps and Forward Rate of Return (Yacktman) % data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
For the REITs industry and Real Estate sector, KKR Real Estate Finance Trust's Forward Rate of Return (Yacktman) % distribution charts can be found below:
* The bar in red indicates where KKR Real Estate Finance Trust's Forward Rate of Return (Yacktman) % falls into.
Forward Rate of Return is a concept that Don Yacktman uses in his investment approach. Yacktman explained the forward rate of return concept in detail in his interview with GuruFocus. Yacktman defines forward rate of return as the normalized free cash flow yield plus real growth plus inflation. He said in the interview (March 2012, when the S&P 500 was at about 1400):
If the business is stable, this calculation is fairly straightforward. For instance, on the S&P 500 we would normalize earnings. We would then calculate what percentage of those earnings are not reinvested in the underlying businesses and are therefore free. Historically, for the S&P 500, this has been just under 50% of earnings. Currently, we expect the S&P to earn about 70 on a normalized basis, a number which is far below reported earnings due to our adjusting for record high profit margins. $70 X ½ / 1400 gives you a normalized free cash flow yield of approximately 2.5%.
The historical real growth rate of the S&P 500 (companies) is about 1.5%. Assuming an inflation rate of 2.5%, the forward rate of return on an investment in the S&P 500 is about 6.5% today (2.5% free cash flow yield plus 1.5% real growth plus 2.5% inflation).
KKR Real Estate Finance Trust's Forward Rate of Return of Dec. 2023 is
Forward Rate of Return | = | Normalized Free Cash Flow | / | Price | + | 5-Year Book Value Growth Rate |
= | 1.99180952 | / | 13.23 | + | 0.0353 | |
= | 18.59 % |
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
KKR Real Estate Finance Trust (NYSE:KREF) Forward Rate of Return (Yacktman) % Explanation
Unlike the Earnings Yield, the Forward Rate of Return uses the normalized Free Cash Flow of the past five years, and considers growth. The forward rate of return can be thought of as the return that investors buying the stock today can expect from it in the future.
For the growth part of the Forward Rate of Return calculation, GuruFocus uses the 5-year average growth rate of Book Value per share as the growth rate, and the growth rate is always capped at 20%. For the Free Cash Flow we use per share data averaged over five years. The reason we use five years is to make it comparable to the growth rate.
Be Aware
In the Forward Rate of Return calculation, the growth rate is added directly to today's free cash flow yield. Therefore the calculation is reliable only if the company can grow at the same rate in the future as it did in the past. Investors should pay close attention to this when researching growth stocks. A more accurate measurement for return is Return on Capital.
Thank you for viewing the detailed overview of KKR Real Estate Finance Trust's Forward Rate of Return (Yacktman) % provided by GuruFocus.com. Please click on the following links to see related term pages.
Lee Christen E.j. | officer: Co-CEO and Co-President | C/O KOHLBERG KRAVIS ROBERTS & CO. L.P., 30 HUDSON YARDS, NEW YORK NY 10001 |
W Patrick Mattson | officer: Chief Operating Off. and Secr | C/O KOHLBERG KRAVIS ROBERTS & CO. L.P., 30 HUDSON YARDS, NEW YORK NY 10001 |
Matthew A Salem | officer: Co-CEO and Co-President | C/O KOHLBERG KRAVIS ROBERTS & CO. L.P., 30 HUDSON YARDS, NEW YORK NY 10001 |
Kkr Group Co. Inc. | 10 percent owner | 30 HUDSON YARDS, NEW YORK NY 10001 |
Kkr Group Partnership L.p. | 10 percent owner | C/O KOHLBERG KRAVIS ROBERTS & CO. L.P., 30 HUDSON YARDS, NEW YORK NY 10001 |
Kkr Reft Holdings L.p. | 10 percent owner | C/O KOHLBERG KRAVIS ROBERTS & CO. L.P., 30 HUDSON YARDS, NEW YORK NY 10001 |
Kendra Decious | officer: CFO and Treasurer | C/O KKR REAL ESTATE FINANCE TRUST INC., 30 HUDSON YARDS, SUITE 7500, NEW YORK NY 10001 |
Vincent J. Napolitano | officer: General Counsel and Secretary | C/O KKR REAL ESTATE FINANCE TRUST INC., 30 HUDSON YARDS, SUITE 7500, NEW YORK NY 10001 |
Tactical Value Spn-kref Holdings L.p. | 10 percent owner | C/O KOHLBERG KRAVIS ROBERTS & CO. L.P., 9 WEST 57TH STREET, SUITE 4200, NEW YORK NY 10019 |
Makena U.s. Real Estate Master Fund B, L.p. | 10 percent owner | 2755 SAND HILL ROAD, SUITE 200, MENLO PARK CA 94025 |
Kkr Management Holdings L.p. | 10 percent owner | 9 WEST 57TH STREET 41ST FLOOR, NEW YORK NY 10019 |
Kkr Group Holdings Corp. | 10 percent owner | C/O KOHLBERG KRAVIS ROBERTS & CO. L.P., 30 HUDSON YARDS, NEW YORK NY 10001 |
Irene M Esteves | director | C/O TIME WARNER CABLE INC., 60 COLUMBUS CIRCLE, 17TH FLOOR, NEW YORK NY 10023 |
Paula Madoff | director | C/O KKR REAL ESTATE FINANCE TRUST INC., 9 WEST 57TH STREET, SUITE 4200, NEW YORK NY 10019 |
Mostafa Nagaty | officer: CFO and Treasurer | C/O KKR REAL ESTATE FINANCE TRUST INC., 9 WEST 57TH STREET, SUITE 4200, NEW YORK NY 10019 |
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