Pearl Diver Credit (NYSE:PDCC) and Lument Finance Trust (NYSE:LFT) Financial Survey

Pearl Diver Credit (NYSE:PDCC) and Lument Finance Trust (NYSE:LFT) are both small-cap finance companies, but which is the better investment? We will compare the two companies based on the strength of their risk, earnings, institutional ownership, dividends, analyst recommendations, valuation and profitability.

Valuation and Earnings

This table compares Pearl Diver Credit and Lument Finance Trust”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Pearl Diver Credit	-$15.07 million	-4.52	N/A	N/A	N/A
Lument Finance Trust	$79.00 million	0.83	$22.65 million	($0.14)	-8.96

Lument Finance Trust has higher revenue and earnings than Pearl Diver Credit.

Risk and Volatility

Pearl Diver Credit has a beta of 0.54, suggesting that its stock price is 46% less volatile than the S&P 500. Comparatively, Lument Finance Trust has a beta of 0.69, suggesting that its stock price is 31% less volatile than the S&P 500.

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Pearl Diver Credit and Lument Finance Trust, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Pearl Diver Credit	0	0	0	1	4.00
Lument Finance Trust	1	1	0	0	1.50

Pearl Diver Credit currently has a consensus price target of $19.50, indicating a potential upside of 94.55%. Given Pearl Diver Credit’s stronger consensus rating and higher probable upside, equities research analysts plainly believe Pearl Diver Credit is more favorable than Lument Finance Trust.

Insider and Institutional Ownership

19.5% of Lument Finance Trust shares are held by institutional investors. 2.8% of Lument Finance Trust shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Profitability

This table compares Pearl Diver Credit and Lument Finance Trust’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Pearl Diver Credit	N/A	N/A	N/A
Lument Finance Trust	-3.47%	7.21%	1.17%

Dividends

Pearl Diver Credit pays an annual dividend of $2.64 per share and has a dividend yield of 26.3%. Lument Finance Trust pays an annual dividend of $0.16 per share and has a dividend yield of 12.7%. Lument Finance Trust pays out -114.3% of its earnings in the form of a dividend. Lument Finance Trust has raised its dividend for 2 consecutive years.

Summary

Lument Finance Trust beats Pearl Diver Credit on 9 of the 14 factors compared between the two stocks.

About Pearl Diver Credit

Pearl Diver Credit Company Inc. is a newly organized, externally managed, non-diversified, closed-end management investment company. Its primary investment objective is to maximize its portfolio’s total return, with a secondary objective of generating high current income. Pearl Diver Credit Company Inc. is based in NEW YORK.

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.