Contrasting Agree Realty (NYSE:ADC) and Lument Finance Trust (NYSE:LFT)

Agree Realty (NYSE:ADC) and Lument Finance Trust (NYSE:LFT) are both finance companies, but which is the better business? We will compare the two companies based on the strength of their dividends, institutional ownership, profitability, earnings, analyst recommendations, valuation and risk.

Valuation & Earnings

This table compares Agree Realty and Lument Finance Trust’s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Agree Realty	$537.49 million	10.68	$169.96 million	$1.71	33.39
Lument Finance Trust	$109.19 million	1.19	$19.72 million	$0.30	8.30

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Agree Realty	31.62%	3.48%	2.29%
Lument Finance Trust	17.02%	9.23%	1.31%

Institutional and Insider Ownership

97.8% of Agree Realty shares are held by institutional investors. Comparatively, 19.5% of Lument Finance Trust shares are held by institutional investors. 1.6% of Agree Realty shares are held by insiders. Comparatively, 2.5% of Lument Finance Trust shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Dividends

Agree Realty pays an annual dividend of $2.96 per share and has a dividend yield of 5.2%. Lument Finance Trust pays an annual dividend of $0.28 per share and has a dividend yield of 11.2%. Agree Realty pays out 173.1% 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 93.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Agree Realty has raised its dividend for 2 consecutive years and Lument Finance Trust has raised its dividend for 1 consecutive years. Lument Finance Trust is clearly the better dividend stock, given its higher yield and lower payout ratio.

Analyst Ratings

This is a breakdown of current ratings and recommmendations for Agree Realty and Lument Finance Trust, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Agree Realty	0	3	6	0	2.67
Lument Finance Trust	0	0	2	0	3.00

Agree Realty presently has a consensus price target of $65.61, suggesting a potential upside of 14.93%. Lument Finance Trust has a consensus price target of $2.63, suggesting a potential upside of 5.42%. Given Agree Realty’s higher probable upside, equities analysts clearly believe Agree Realty is more favorable than Lument Finance Trust.

Risk and Volatility

Agree Realty has a beta of 0.52, suggesting that its stock price is 48% less volatile than the S&P 500. Comparatively, Lument Finance Trust has a beta of 1.06, suggesting that its stock price is 6% more volatile than the S&P 500.

Summary

Agree Realty beats Lument Finance Trust on 11 of the 17 factors compared between the two stocks.

About Agree Realty

Agree Realty Corporation is a publicly traded real estate investment trust that is RETHINKING RETAIL through the acquisition and development of properties net leased to industry-leading, omni-channel retail tenants. As of December 31, 2023, the Company owned and operated a portfolio of 2,135 properties, located in 49 states and containing approximately 44.2 million square feet of gross leasable area. The Company's common stock is listed on the New York Stock Exchange under the symbol "ADC".

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 commercial 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. The company was incorporated in 2012 and is headquartered in New York, New York.