Lument Finance Trust (NYSE:LFT) versus Rithm Property Trust (NYSE:RPT) Critical Review

Rithm Property Trust (NYSE:RPT) and Lument Finance Trust (NYSE:LFT) are both small-cap finance companies, but which is the superior investment? We will contrast the two companies based on the strength of their risk, valuation, profitability, analyst recommendations, dividends, earnings and institutional ownership.

Earnings and Valuation

This table compares Rithm Property Trust and Lument Finance Trust”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Rithm Property Trust	$52.80 million	1.89	$1.47 million	($0.26)	-49.38
Lument Finance Trust	$16.04 million	2.34	-$2.74 million	($0.36)	-1.99

Rithm Property Trust has higher revenue and earnings than Lument Finance Trust. Rithm Property Trust is trading at a lower price-to-earnings ratio than Lument Finance Trust, indicating that it is currently the more affordable of the two stocks.

Institutional & Insider Ownership

58.6% of Rithm Property Trust shares are owned by institutional investors. Comparatively, 19.5% of Lument Finance Trust shares are owned by institutional investors. 0.4% of Rithm Property Trust shares are owned by insiders. Comparatively, 3.3% of Lument Finance Trust shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Risk & Volatility

Rithm Property Trust has a beta of 1.23, meaning that its share price is 23% more volatile than the S&P 500. Comparatively, Lument Finance Trust has a beta of 0.57, meaning that its share price is 43% less volatile than the S&P 500.

Profitability

This table compares Rithm Property Trust and Lument Finance Trust’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Rithm Property Trust	5.87%	1.20%	0.29%
Lument Finance Trust	-18.00%	0.86%	0.12%

Dividends

Rithm Property Trust pays an annual dividend of $1.44 per share and has a dividend yield of 11.2%. Lument Finance Trust pays an annual dividend of $0.16 per share and has a dividend yield of 22.4%. Rithm Property Trust pays out -553.8% of its earnings in the form of a dividend. Lument Finance Trust pays out -44.4% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Lument Finance Trust has raised its dividend for 2 consecutive years. Lument Finance Trust is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Recommendations

This is a summary of current ratings and price targets for Rithm Property Trust and Lument Finance Trust, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Rithm Property Trust	1	0	0	1	2.50
Lument Finance Trust	1	0	0	0	1.00

Summary

Rithm Property Trust beats Lument Finance Trust on 11 of the 16 factors compared between the two stocks.

About Rithm Property Trust

Rithm Property Trust Inc is a real estate investment trust (REIT) externally managed by an affiliate of Rithm Capital Corp. (Rithm). The company focuses on commercial real estate-focused investment, including originating, acquiring and managing portfolios of CMBS, commercial real property, commercial mortgage loans and other CRE investments. It has two reportable operating segments: Residential and Commercial. The majority of the company’s revenue is derived from the Residential segment, which is focused on managing a portfolio that includes residential mortgage assets, including whole mortgage loans, RMBS and beneficial interests.

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.