Comparing Empire State Realty Trust (NYSE:ESRT) & Lument Finance Trust (NYSE:LFT)

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

Analyst Ratings

This is a breakdown of current recommendations and price targets for Empire State Realty Trust and Lument Finance Trust, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Empire State Realty Trust	1	0	1	0	2.00
Lument Finance Trust	0	1	1	0	2.50

Empire State Realty Trust presently has a consensus target price of $11.50, suggesting a potential upside of 20.55%. Lument Finance Trust has a consensus target price of $2.50, suggesting a potential upside of 3.31%. Given Empire State Realty Trust’s higher possible upside, equities analysts plainly believe Empire State Realty Trust is more favorable than Lument Finance Trust.

Valuation and Earnings

This table compares Empire State Realty Trust and Lument Finance Trust”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Empire State Realty Trust	$763.20 million	2.08	$53.24 million	$0.27	35.33
Lument Finance Trust	$34.66 million	3.65	$19.72 million	$0.36	6.72

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Empire State Realty Trust	6.22%	2.73%	1.10%
Lument Finance Trust	18.19%	14.41%	1.98%

Volatility & Risk

Empire State Realty Trust has a beta of 1.41, meaning that its share price is 41% more volatile than the S&P 500. Comparatively, Lument Finance Trust has a beta of 1.07, meaning that its share price is 7% more volatile than the S&P 500.

Dividends

Empire State Realty Trust pays an annual dividend of $0.14 per share and has a dividend yield of 1.5%. Lument Finance Trust pays an annual dividend of $0.32 per share and has a dividend yield of 13.2%. Empire State Realty Trust pays out 51.9% of its earnings in the form of a dividend. Lument Finance Trust pays out 88.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Insider & Institutional Ownership

67.1% of Empire State Realty Trust shares are owned by institutional investors. Comparatively, 19.5% of Lument Finance Trust shares are owned by institutional investors. 14.0% of Empire State Realty Trust shares are owned by insiders. Comparatively, 2.7% of Lument Finance Trust shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Summary

Empire State Realty Trust beats Lument Finance Trust on 8 of the 15 factors compared between the two stocks.

About Empire State Realty Trust

Empire State Realty Trust, Inc. (NYSE: ESRT) is a NYC-focused REIT that owns and operates a portfolio of modernized, amenitized, and well-located office, retail, and multifamily assets. The company is the recognized leader in energy efficiency and indoor environmental quality. ESRT’s flagship Empire State Building – the “World’s Most Famous Building” – includes its Observatory, Tripadvisor’s 2023 Travelers’ Choice Awards: Best of the Best the #1 attraction in the US for two consecutive years. As of September 30, 2023, ESRT’s portfolio is comprised of approximately 8.6 million rentable square feet of office space, 0.7 million rentable square feet of retail space and 727 residential units across three multifamily properties.

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.