Critical Analysis: CV (OTCMKTS:CVHL) versus Lument Finance Trust (NYSE:LFT)

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

Profitability

This table compares Lument Finance Trust and CV’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%
CV	N/A	N/A	N/A

Institutional & Insider Ownership

19.5% of Lument Finance Trust shares are held by institutional investors. 2.7% of Lument Finance Trust shares are held by company insiders. Comparatively, 7.6% of CV shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Valuation and Earnings

This table compares Lument Finance Trust and CV”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Lument Finance Trust	$34.66 million	4.15	$19.72 million	$0.36	7.64
CV	$23.58 million	0.02	-$15.96 million	N/A	N/A

Lument Finance Trust has higher revenue and earnings than CV.

Analyst Ratings

This is a breakdown of current recommendations for Lument Finance Trust and CV, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Lument Finance Trust	0	1	1	0	2.50
CV	0	0	0	0	0.00

Lument Finance Trust presently has a consensus target price of $2.50, suggesting a potential downside of 9.09%. Given Lument Finance Trust’s stronger consensus rating and higher probable upside, analysts clearly believe Lument Finance Trust is more favorable than CV.

Volatility and Risk

Lument Finance Trust has a beta of 1.08, indicating that its stock price is 8% more volatile than the S&P 500. Comparatively, CV has a beta of 0.52, indicating that its stock price is 48% less volatile than the S&P 500.

Summary

Lument Finance Trust beats CV on 11 of the 12 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 CV

CV Holdings, Inc. operates as a specialty finance company. It owns finance platforms across various businesses, including small-ticket equipment financing and commercial real estate bridge lending. CV Holdings, Inc. was incorporated in 2005 and is based in Newport Beach, California.