Financial Comparison: HG (OTCMKTS:STLY) & Lument Finance Trust (NYSE:LFT)

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Lument Finance Trust	18.19%	14.41%	1.98%
HG	-3.70%	-1.31%	-0.92%

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for Lument Finance Trust and HG, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Lument Finance Trust	0	2	1	0	2.33
HG	0	0	0	0	0.00

Lument Finance Trust presently has a consensus target price of $2.50, indicating a potential downside of 0.20%. Given Lument Finance Trust’s stronger consensus rating and higher probable upside, analysts plainly believe Lument Finance Trust is more favorable than HG.

Insider and Institutional Ownership

19.5% of Lument Finance Trust shares are held by institutional investors. Comparatively, 1.7% of HG shares are held by institutional investors. 2.7% of Lument Finance Trust shares are held by company insiders. Comparatively, 36.1% of HG shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Earnings and Valuation

This table compares Lument Finance Trust and HG”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Lument Finance Trust	$34.86 million	3.76	$19.72 million	$0.35	7.16
HG	$11.11 million	1.16	-$820,000.00	($0.08)	-56.25

Lument Finance Trust has higher revenue and earnings than HG. HG 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.

Volatility and Risk

Lument Finance Trust has a beta of 0.83, indicating that its share price is 17% less volatile than the S&P 500. Comparatively, HG has a beta of 0.61, indicating that its share price is 39% less volatile than the S&P 500.

Summary

Lument Finance Trust beats HG 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 HG

HG Holdings, Inc. engages in the title insurance and real estate businesses in the United States. It operates through four segments: Title Insurance Services, Reinsurance, Management Services, and Real Estate. The company provides title insurance, closing and/or escrow, and similar or related services in connection with residential and commercial real estate transactions. It also owns and operates a portfolio of single-tenant properties leased for the occupancy by U.S. government tenant agencies and sub-agencies, such as the Federal Bureau of Investigation, the Department of Veterans affairs, the Drug Enforcement Administration, Immigration & Customs Enforcement, the Social Security Administration, and the Department of Transportation. In addition, the company provides excess-of-loss reinsurance coverage related to catastrophic weather risk in Texas; and management advisory services, such as formation, operational, and restructuring services. The company was formerly known as Stanley Furniture Company, Inc. and changed its name to HG Holdings, Inc. in March 2018. HG Holdings, Inc. was incorporated in 1984 and is headquartered in Charlotte, North Carolina.