Lument Finance Trust (NYSE:LFT – Get Free Report) and Finward Bancorp (NASDAQ:FNWD – Get Free Report) are both small-cap finance companies, but which is the better investment? We will compare the two businesses based on the strength of their earnings, risk, analyst recommendations, institutional ownership, dividends, valuation and profitability.
Insider and Institutional Ownership
19.5% of Lument Finance Trust shares are held by institutional investors. Comparatively, 26.6% of Finward Bancorp shares are held by institutional investors. 3.3% of Lument Finance Trust shares are held by insiders. Comparatively, 13.1% of Finward Bancorp shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.
Analyst Recommendations
This is a summary of current recommendations for Lument Finance Trust and Finward Bancorp, 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 |
| Finward Bancorp | 0 | 0 | 2 | 0 | 3.00 |
Valuation and Earnings
This table compares Lument Finance Trust and Finward Bancorp”s top-line revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Lument Finance Trust | $79.00 million | 0.65 | -$2.74 million | ($0.13) | -7.55 |
| Finward Bancorp | $101.06 million | 1.58 | $8.09 million | $2.29 | 16.07 |
Finward Bancorp has higher revenue and earnings than Lument Finance Trust. Lument Finance Trust is trading at a lower price-to-earnings ratio than Finward Bancorp, indicating that it is currently the more affordable of the two stocks.
Profitability
This table compares Lument Finance Trust and Finward Bancorp’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Lument Finance Trust | -2.59% | 5.65% | 0.86% |
| Finward Bancorp | 9.72% | 5.92% | 0.48% |
Dividends
Lument Finance Trust pays an annual dividend of $0.16 per share and has a dividend yield of 16.3%. Finward Bancorp pays an annual dividend of $0.48 per share and has a dividend yield of 1.3%. Lument Finance Trust pays out -123.1% of its earnings in the form of a dividend. Finward Bancorp pays out 21.0% 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.
Volatility & Risk
Lument Finance Trust has a beta of 0.53, meaning that its share price is 47% less volatile than the S&P 500. Comparatively, Finward Bancorp has a beta of 0.18, meaning that its share price is 82% less volatile than the S&P 500.
Summary
Finward Bancorp beats Lument Finance Trust on 12 of the 17 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 Finward Bancorp
Finward Bancorp operates as the holding company for Peoples Bank that provides various banking products and services. The company’s deposit products include non-interest- and interest-bearing demand accounts, savings accounts, money market deposit accounts, certificate accounts, and retirement savings plans. Its loan products portfolio comprises residential mortgage loans that enable borrowers to purchase existing homes, refinance existing homes, or construct new homes; construction loans primarily to individuals and contractors; commercial real estate loans; consumer loans to individuals for personal, household, or family purposes; home equity line of credit; home improvement loans and equity loans; commercial business loans; government loans; and loans to municipalities. The company also offers estate and retirement planning, custodial services, guardianships, IRA accounts, and investment agency accounts, as well as serves as the personal representative of estates, and acts as trustee for revocable and irrevocable trusts. In addition, it provides insurance and annuity investments to wealth management customers; holds real estate properties; and operates as a real estate investment trust. The company was formerly known as NorthWest Indiana Bancorp and changed its name to Finward Bancorp in May 2021. Finward Bancorp was founded in 1916 and is headquartered in Munster, Indiana.
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