Operating performance

KKR & Company (KKR) expects to post EPS (earnings per share) of $0.41 in 3Q16, reflecting a subdued performance compared to its 3Q15 numbers. The company reported an economic net income of $598 million in 3Q16, mainly due to appreciation in private equity and energy holdings.

The stock has risen 5% in the past quarter, mainly due to improved performance, higher deployments, and distributions.

KKR Valuations Fair amid Volatile Performance and Capital Raises

First Data (FDC) is one of KKR’s major holdings. The stock has risen 24% in 3Q16, as compared to a substantial decline in previous quarters. Over the past four quarters, KKR has successfully raised $28 billion across its product offerings. The company deployed $3.7 billion in 3Q16, mainly in private markets across Americas, Europe, and Asia.

KKR declared a dividend of $0.16 per share in 3Q16. This dividend translated into an annualized dividend yield of 4%. Its peers have the following dividend yields:

  • Carlyle Group (CG): 14%
  • Apollo Global Management (APO): 12.8%
  • Blackstone Group (BX): 6.3%

Together, these companies make up 4.3% of the PowerShares Global Listed Private Equity ETF (PSP).


KKR is valued at 7.5x on a one-year forward earnings basis. By comparison, its peers are trading at 9.3x. The company is trading at a discount, mainly due to weak performance in 1H16 and lower dividend yields when compared with the industry average. KKR’s reported AUM (assets under management) reached ~$131.1 billion in 3Q16. Its fee-paying AUM were ~$93.1 billion.

KKR has fallen 11% over the past 12 months due to volatile markets, declining performance income, and unrealized losses on various investments. However, the recent improvement in performance is expected to attract more capital towards the company’s existing offerings.

For more details on KKR & Company’s business, check out Market Realist’s “KKR: The $100-Billion Alternative Asset Manager.”

Latest articles

23 Jul

Will Fortinet Beat Q2 Earnings Estimates?

WRITTEN BY Aditya Raghunath

Leading cybersecurity company Fortinet (FTNT) is scheduled to announce its second-quarter earnings results on August 1. What should we expect?

Harley-Davidson’s Q2 earnings were slightly better than estimates.

Netflix (NFLX) has long relied on international markets to drive its streaming video business growth.

23 Jul

Could Ford’s Q2 Earnings Push Its Stock Even Higher?

WRITTEN BY Mohit Oberoi, CFA

Ford's second-quarter earnings results are scheduled for release on July 24. So far, Ford stock has outperformed its legacy peers.

23 Jul

Why RBC Isn't Optimistic about BlackBerry Stock

WRITTEN BY Aditya Raghunath

Shares of BlackBerry (BB) have been volatile over the last 12 months. BlackBerry stock fell 40.5% from $12.0 in September 2018 to $6.57 in December.

According to a Wall Street Journal report, Apple (AAPL) could be interested in buying Intel’s modem chip business.