Financial Review: Lument Finance Trust (NYSE:LFT) versus Alexander’s (NYSE:ALX)

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

Dividends

Alexander’s pays an annual dividend of $18.00 per share and has a dividend yield of 7.6%. Lument Finance Trust pays an annual dividend of $0.32 per share and has a dividend yield of 12.4%. Alexander’s pays out 86.0% 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 100.0% 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 has increased 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.

Institutional and Insider Ownership

32.0% of Alexander’s shares are owned by institutional investors. Comparatively, 19.5% of Lument Finance Trust shares are owned by institutional investors. 26.3% of Alexander’s shares are owned by insiders. Comparatively, 2.7% of Lument Finance Trust shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Earnings and Valuation

This table compares Alexander’s and Lument Finance Trust’s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Alexander’s	$224.96 million	N/A	$102.41 million	$20.92	11.34
Lument Finance Trust	$109.19 million	1.24	$19.72 million	$0.32	8.08

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

Analyst Recommendations

This is a summary of recent ratings and price targets for Alexander’s and Lument Finance Trust, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Alexander’s	1	0	0	0	1.00
Lument Finance Trust	0	0	3	0	3.00

Alexander’s presently has a consensus price target of $135.00, indicating a potential downside of 43.08%. Lument Finance Trust has a consensus price target of $2.58, indicating a potential downside of 0.06%. Given Lument Finance Trust’s stronger consensus rating and higher possible upside, analysts clearly believe Lument Finance Trust is more favorable than Alexander’s.

Risk & Volatility

Alexander’s has a beta of 0.81, indicating that its share price is 19% less volatile than the S&P 500. Comparatively, Lument Finance Trust has a beta of 1.07, indicating that its share price is 7% more volatile than the S&P 500.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Alexander’s	45.97%	43.56%	7.62%
Lument Finance Trust	16.43%	12.59%	1.71%

Summary

Alexander’s beats Lument Finance Trust on 10 of the 16 factors compared between the two stocks.

About Alexander’s

Alexander's, Inc. is a real estate investment trust which has five properties in New York City.

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.