KKR & Co. Inc.

(New York Stock Exchange)
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Somewhat Bearish -45

Blackstone (BX) vs KKR (KKR): Which is a Better Stock to Buy? - Yahoo Finance

Company update AI-generated analysis

πŸ“‰ KKR & Co. (NYSE:KKR) closed at $90.29 on October 2, down 28.83% over twelve months as investors sold the stock alongside Blackstone despite the wider market rising.

πŸ’° KKR manages only 20.65% of revenue into operating profit compared to Blackstone's 54.36%, reflecting a shift from a fee machine model to one reliant on lower-return spread income.

πŸ“Š KKR's return on equity stands at 7.28% versus Blackstone's 31.37%, driven by the capital-intensive nature of its insurance asset acquisitions totaling $47.56 billion in cash and $56.16 billion in debt.

πŸš€ Revenue growth for KKR was 7.80% in the most recent quarter, significantly trailing Blackstone's 28.60% growth driven by recurring fee income on committed capital.

πŸ’΅ KKR trades at 12.99 times next year's estimates and 3.06 times book value, making it substantially cheaper than Blackstone which trades at 15.90 times forward earnings.

🏦 KKR holds $47.56 billion in cash and $56.16 billion in debt against $25.83 billion in revenue, contrasting with Blackstone's asset-light balance sheet of $15.3 billion debt against $15.48 billion revenue.

πŸ“‰ Hedge fund interest in KKR declined in Q2 2026, dropping from 82 holders with $4.19 billion invested to 77 holders with $3.57 billion invested by the end of the quarter.

πŸ’Έ KKR pays a low 0.8% dividend yield and reinvests capital, whereas Blackstone offers a 4.66% yield to shareholders while facing fundraising headwinds.

πŸ“‰ The stock price fall for KKR is attributed to the broader challenge of private market fundraising slowing as institutions find it harder to allocate to the asset class.

βš–οΈ Investors face a choice between Blackstone's exceptional business quality at a demanding price or KKR's ordinary business at a reasonable price without income attachment.

Bullish Signals
  • KKR offers a significantly lower valuation than peers, trading at 12.99 times forward earnings and 3.06 times book value compared to Blackstone's much higher multiples.
  • The company holds substantial liquidity with $47.56 billion in cash on its balance sheet, providing flexibility for strategic moves or debt management.
  • KKR has successfully diversified its revenue streams by acquiring insurance assets that generate spread income, creating a different business profile than pure fee-based peers.
Risk Factors
  • KKR's profitability is materially lower than Blackstone, converting only 20.65% of revenue into operating profit compared to Blackstone's 54.36%.
  • The company's return on equity is weak at 7.28%, significantly below Blackstone's 31.37%, due to the lower returns generated by its insurance asset spread income model.
  • Revenue growth for KKR was sluggish at 7.80% in the most recent quarter, trailing Blackstone's robust 28.60% growth driven by fee compounding.
  • KKR carries a heavy debt load of $56.16 billion against its revenue base, reflecting its balance-sheet-heavy strategy which contrasts with Blackstone's asset-light approach.
  • Hedge fund ownership in KKR has declined, dropping from 82 holders with $4.19 billion invested to 77 holders with $3.57 billion in Q2 2026.
  • The stock price has fallen 28.83% over twelve months, indicating market concerns about the sustainability of its business model and fundraising environment.
Full Analysis
KKR & Co. (NYSE:KKR) and Blackstone Inc. (NYSE:BX) have diverged significantly in business models, with KKR shifting toward a balance-sheet-heavy approach involving insurance assets while Blackstone maintains an asset-light fee structure. As of October 2, KKR closed at $90.29 compared to Blackstone's $111.75, reflecting broader market skepticism despite the wider market rising 14% over the past year. The article highlights stark differences in profitability metrics, noting that Blackstone converts 54.36% of revenue into operating profit versus KKR's 20.65%. Consequently, Blackstone achieves a return on equity of 31.37% compared to KKR's 7.28%, driven by its ability to generate recurring fee income on committed capital rather than lower-return spread income from insurance assets. Valuation disparities are pronounced, with KKR trading at 12.99 times forward earnings and 3.06 times book value, while Blackstone commands 15.90 times forward earnings and nearly ten times book value. Both companies face headwinds from a slowdown in private market fundraising, which has pressured their stock prices, though Blackstone offers a 4.66% yield to shareholders while KKR reinvests capital at a lower 0.8% yield. Hedge fund holdings for both entities declined in Q2 2026, with KKR seeing its stake drop from $4.19 billion to $3.57 billion and Blackstone's falling from $2.02 billion to $1.77 billion. The analysis concludes that investors must choose between Blackstone's superior quality and higher valuation or KKR's lower-quality business at a significantly cheaper price point.