HG (OTCMKTS:STLY) and Lument Finance Trust (NYSE:LFT) Financial Contrast

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

Risk & Volatility

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

Analyst Ratings

This is a breakdown of recent ratings for HG and Lument Finance Trust, as reported by MarketBeat.

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

Lument Finance Trust has a consensus price target of $2.50, suggesting 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.

Earnings and Valuation

This table compares HG 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
HG	$11.11 million	1.16	-$820,000.00	($0.08)	-56.25
Lument Finance Trust	$34.86 million	3.76	$19.72 million	$0.35	7.16

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.

Institutional & Insider Ownership

1.7% of HG shares are owned by institutional investors. Comparatively, 19.5% of Lument Finance Trust shares are owned by institutional investors. 36.1% of HG shares are owned by company insiders. Comparatively, 2.7% of Lument Finance Trust shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Profitability

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

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

Summary

Lument Finance Trust beats HG on 13 of the 14 factors compared between the two stocks.

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.

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.