Critical Analysis: Lument Finance Trust (NYSE:LFT) vs. ACRES Commercial Realty (NYSE:ACR)

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

Analyst Recommendations

This is a summary of current recommendations and price targets for ACRES Commercial Realty and Lument Finance Trust, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
ACRES Commercial Realty	1	1	2	0	2.25
Lument Finance Trust	1	0	0	0	1.00

ACRES Commercial Realty presently has a consensus target price of $24.50, suggesting a potential upside of 91.41%. Given ACRES Commercial Realty’s stronger consensus rating and higher probable upside, research analysts clearly believe ACRES Commercial Realty is more favorable than Lument Finance Trust.

Risk & Volatility

ACRES Commercial Realty has a beta of 1.06, indicating that its share price is 6% more volatile than the S&P 500. Comparatively, Lument Finance Trust has a beta of 0.57, indicating that its share price is 43% less volatile than the S&P 500.

Earnings and Valuation

This table compares ACRES Commercial Realty 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
ACRES Commercial Realty	$79.95 million	1.14	$21.32 million	($1.12)	-11.43
Lument Finance Trust	$79.00 million	0.37	-$2.74 million	($3.60)	-1.53

ACRES Commercial Realty has higher revenue and earnings than Lument Finance Trust. ACRES Commercial Realty 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.

Profitability

This table compares ACRES Commercial Realty and Lument Finance Trust’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
ACRES Commercial Realty	22.62%	2.42%	0.58%
Lument Finance Trust	-18.00%	0.86%	0.12%

Insider & Institutional Ownership

40.0% of ACRES Commercial Realty shares are held by institutional investors. Comparatively, 19.5% of Lument Finance Trust shares are held by institutional investors. 4.6% of ACRES Commercial Realty shares are held by company insiders. Comparatively, 3.3% of Lument Finance Trust shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Summary

ACRES Commercial Realty beats Lument Finance Trust on 13 of the 14 factors compared between the two stocks.

About ACRES Commercial Realty

ACRES Commercial Realty Corp., a real estate investment trust (REIT), focuses on the origination, holding, and management of commercial real estate mortgage loans and equity investments in commercial real estate property in the United States. It invests in commercial real estate-related assets, including floating-rate first mortgage loans, first priority interests in first mortgage loans, subordinated interests in first mortgage loans, mezzanine financing, preferred equity investments, and commercial mortgage-backed securities. The company qualifies as a real estate investment trust for federal income tax purposes. It generally would not be subject to federal corporate income taxes if it distributes at least 90% of its taxable income to its stockholders. The company was formerly known as Exantas Capital Corp. and changed its name to ACRES Commercial Realty Corp. in February 2021. ACRES Commercial Realty Corp. was incorporated in 2005 and is based in Uniondale, 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.