Manhattan Bridge Capital (NASDAQ:LOAN) and Lument Finance Trust (NYSE:LFT) Critical Analysis

Manhattan Bridge Capital (NASDAQ:LOAN) and Lument Finance Trust (NYSE:LFT) are both small-cap finance companies, but which is the better stock? We will compare the two companies based on the strength of their risk, institutional ownership, profitability, earnings, valuation, analyst recommendations and dividends.

Institutional and Insider Ownership

21.8% of Manhattan Bridge Capital shares are held by institutional investors. Comparatively, 19.5% of Lument Finance Trust shares are held by institutional investors. 24.5% of Manhattan Bridge Capital shares are held by company insiders. Comparatively, 2.7% of Lument Finance Trust shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Dividends

Manhattan Bridge Capital pays an annual dividend of $0.46 per share and has a dividend yield of 8.0%. Lument Finance Trust pays an annual dividend of $0.32 per share and has a dividend yield of 12.1%. Manhattan Bridge Capital pays out 93.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. 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. Lument Finance Trust is clearly the better dividend stock, given its higher yield and lower payout ratio.

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for Manhattan Bridge Capital and Lument Finance Trust, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Manhattan Bridge Capital	0	0	0	0	0.00
Lument Finance Trust	0	1	1	0	2.50

Lument Finance Trust has a consensus target price of $2.50, indicating a potential downside of 5.12%. Given Lument Finance Trust’s stronger consensus rating and higher probable upside, analysts plainly believe Lument Finance Trust is more favorable than Manhattan Bridge Capital.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Manhattan Bridge Capital	56.93%	13.06%	7.75%
Lument Finance Trust	18.19%	14.41%	1.98%

Volatility and Risk

Manhattan Bridge Capital has a beta of 0.55, suggesting that its share price is 45% less volatile than the S&P 500. Comparatively, Lument Finance Trust has a beta of 1.07, suggesting that its share price is 7% more volatile than the S&P 500.

Earnings and Valuation

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Manhattan Bridge Capital	$7.41 million	8.86	$5.48 million	$0.49	11.71
Lument Finance Trust	$109.19 million	1.26	$19.72 million	$0.36	7.32

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

Summary

Lument Finance Trust beats Manhattan Bridge Capital on 9 of the 16 factors compared between the two stocks.

About Manhattan Bridge Capital

Manhattan Bridge Capital, Inc., a real estate finance company, originates, services, and manages a portfolio of first mortgage loans in the United States. The company offers short-term, secured, and non-banking loans to real estate investors to fund acquisition, renovation, rehabilitation, or development of residential or commercial properties. Its loans are secured by collateral consisting of real estate and accompanied by personal guarantees from the principals of the borrowers. The company has elected to be taxed as a real estate investment trust. As a result, it would not be subject to corporate income tax on that portion of its net income that is distributed to shareholders. The company was founded in 1989 and is headquartered in Great Neck, 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.