Lument Finance Trust (NYSE:LFT – Get Free Report) and Apollo Commercial Real Estate Finance (NYSE:ARI – Get Free Report) are both small-cap finance companies, but which is the superior business? We will contrast the two companies based on the strength of their dividends, earnings, valuation, risk, analyst recommendations, profitability and institutional ownership.
Earnings & Valuation
This table compares Lument Finance Trust and Apollo Commercial Real Estate Finance”s top-line revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Lument Finance Trust | $16.04 million | 1.27 | -$2.74 million | ($3.60) | -1.08 |
| Apollo Commercial Real Estate Finance | -$85.39 million | -3.51 | $126.72 million | $0.80 | 2.91 |
Apollo Commercial Real Estate Finance has lower revenue, but higher earnings than Lument Finance Trust. Lument Finance Trust is trading at a lower price-to-earnings ratio than Apollo Commercial Real Estate Finance, indicating that it is currently the more affordable of the two stocks.
Insider & Institutional Ownership
19.5% of Lument Finance Trust shares are held by institutional investors. Comparatively, 54.4% of Apollo Commercial Real Estate Finance shares are held by institutional investors. 3.3% of Lument Finance Trust shares are held by insiders. Comparatively, 0.5% of Apollo Commercial Real Estate Finance shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.
Analyst Ratings
This is a summary of current ratings and price targets for Lument Finance Trust and Apollo Commercial Real Estate Finance, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Lument Finance Trust | 1 | 0 | 0 | 0 | 1.00 |
| Apollo Commercial Real Estate Finance | 1 | 3 | 2 | 0 | 2.17 |
Apollo Commercial Real Estate Finance has a consensus target price of $11.33, indicating a potential upside of 386.41%. Given Apollo Commercial Real Estate Finance’s stronger consensus rating and higher probable upside, analysts plainly believe Apollo Commercial Real Estate Finance is more favorable than Lument Finance Trust.
Volatility and Risk
Lument Finance Trust has a beta of 0.61, indicating that its share price is 39% less volatile than the S&P 500. Comparatively, Apollo Commercial Real Estate Finance has a beta of 1.4, indicating that its share price is 40% more volatile than the S&P 500.
Dividends
Lument Finance Trust pays an annual dividend of $1.60 per share and has a dividend yield of 41.3%. Apollo Commercial Real Estate Finance pays an annual dividend of $1.00 per share and has a dividend yield of 42.9%. Lument Finance Trust pays out -44.4% of its earnings in the form of a dividend. Apollo Commercial Real Estate Finance pays out 125.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Lument Finance Trust has increased its dividend for 2 consecutive years.
Profitability
This table compares Lument Finance Trust and Apollo Commercial Real Estate Finance’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Lument Finance Trust | -18.00% | 0.86% | 0.12% |
| Apollo Commercial Real Estate Finance | 55.49% | 7.39% | 1.58% |
Summary
Apollo Commercial Real Estate Finance beats Lument Finance Trust on 12 of the 17 factors compared between the two stocks.
About Lument Finance Trust
Lument Finance Trust, Inc., a real estate investment trust, focuses on investing in, financing, and managing a portfolio of commercial real estate (CRE) debt investments in the United States. The company primarily invests in transitional floating rate CRE mortgage loans on middle market multi-family assets; and other CRE -related investments, including mezzanine loans, preferred equity, commercial mortgage-backed securities, fixed rate loans, construction loans, and other CRE debt instruments. Lument Finance Trust, Inc. is qualified as a real estate investment trust (REIT) under the Internal Revenue Code of 1986. As a REIT, it would not be subject to federal income taxes if it distributes at least 90% of its taxable income to its stockholders. The company was formerly known as Hunt Companies Finance Trust, Inc. and changed its name to Lument Finance Trust, Inc. in December 2020. Lument Finance Trust, Inc. was incorporated in 2012 and is headquartered in New York, New York.
About Apollo Commercial Real Estate Finance
Apollo Commercial Real Estate Finance, Inc. operates as a real estate investment trust (REIT) that originates, acquires, invests in, and manages commercial first mortgage loans, subordinate financings, and other commercial real estate-related debt investments in the United States, the United Kingdom, and Europe. It is qualified as a REIT under the Internal Revenue Code. As a REIT, it would not be subject to federal income taxes, if the company distributes at least 90% of its REIT taxable income to its stockholders. Apollo Commercial Real Estate Finance, Inc. was incorporated in 2009 and is based in New York, New York.
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