Apollo Commercial Real Estate Finance (NYSE:ARI) and Lument Finance Trust (NYSE:LFT) Head-To-Head Survey

Lument Finance Trust (NYSE:LFT) and Apollo Commercial Real Estate Finance (NYSE:ARI) are both small-cap finance companies, but which is the better business? We will contrast the two businesses based on the strength of their institutional ownership, dividends, analyst recommendations, profitability, earnings, valuation and risk.

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%

Institutional & Insider 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 company insiders. Comparatively, 0.5% of Apollo Commercial Real Estate Finance shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Analyst Recommendations

This is a summary of current ratings for Lument Finance Trust and Apollo Commercial Real Estate Finance, as provided by MarketBeat.com.

	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, suggesting a potential upside of 389.56%. Given Apollo Commercial Real Estate Finance’s stronger consensus rating and higher possible upside, analysts clearly believe Apollo Commercial Real Estate Finance is more favorable than Lument Finance Trust.

Earnings and 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	$79.00 million	0.26	-$2.74 million	($3.60)	-1.11
Apollo Commercial Real Estate Finance	$271.59 million	1.10	$126.72 million	$0.80	2.89

Apollo Commercial Real Estate Finance has higher revenue and 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.

Volatility & Risk

Lument Finance Trust has a beta of 0.66, suggesting that its share price is 34% less volatile than the S&P 500. Comparatively, Apollo Commercial Real Estate Finance has a beta of 1.53, suggesting that its share price is 53% more volatile than the S&P 500.

Summary

Apollo Commercial Real Estate Finance beats Lument Finance Trust on 13 of the 14 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.