Head to Head Analysis: Lument Finance Trust (NYSE:LFT) & Sun Communities (NYSE:SUI)

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

Analyst Ratings

This is a breakdown of current ratings for Lument Finance Trust and Sun Communities, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Lument Finance Trust	0	0	2	0	3.00
Sun Communities	0	5	6	0	2.55

Lument Finance Trust currently has a consensus price target of $2.63, suggesting a potential upside of 14.13%. Sun Communities has a consensus price target of $138.92, suggesting a potential upside of 18.43%. Given Sun Communities’ higher possible upside, analysts plainly believe Sun Communities is more favorable than Lument Finance Trust.

Risk & Volatility

Lument Finance Trust has a beta of 1.07, indicating that its share price is 7% more volatile than the S&P 500. Comparatively, Sun Communities has a beta of 0.83, indicating that its share price is 17% less volatile than the S&P 500.

Valuation and Earnings

This table compares Lument Finance Trust and Sun Communities’ revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Lument Finance Trust	$109.19 million	1.10	$19.72 million	$0.30	7.67
Sun Communities	$3.22 billion	4.53	-$201.00 million	$1.16	101.12

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Lument Finance Trust	17.02%	9.23%	1.31%
Sun Communities	4.46%	1.87%	0.84%

Dividends

Lument Finance Trust pays an annual dividend of $0.28 per share and has a dividend yield of 12.2%. Sun Communities pays an annual dividend of $3.76 per share and has a dividend yield of 3.2%. 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. Sun Communities pays out 324.1% 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 has raised its dividend for 1 consecutive years and Sun Communities has raised its dividend for 8 consecutive years. Lument Finance Trust is clearly the better dividend stock, given its higher yield and lower payout ratio.

Institutional & Insider Ownership

19.5% of Lument Finance Trust shares are owned by institutional investors. Comparatively, 99.6% of Sun Communities shares are owned by institutional investors. 2.5% of Lument Finance Trust shares are owned by company insiders. Comparatively, 1.9% of Sun Communities shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Summary

Lument Finance Trust beats Sun Communities on 9 of the 17 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 Sun Communities

Established in 1975, Sun Communities, Inc. became a publicly owned corporation in December 1993. The Company is a fully integrated REIT listed on the New York Stock Exchange under the symbol: SUI. As of December 31, 2023, the Company owned, operated, or had an interest in a portfolio of 667 developed MH, RV and Marina properties comprising 179,310 developed sites and approximately 48,030 wet slips and dry storage spaces in the U.S., the UK and Canada.