Pearl Diver Credit (NYSE:PDCC) and Lument Finance Trust (NYSE:LFT) Head to Head Analysis

Lument Finance Trust (NYSE:LFT) and Pearl Diver Credit (NYSE:PDCC) are both small-cap finance companies, but which is the better investment? We will contrast the two businesses based on the strength of their risk, profitability, valuation, dividends, earnings, institutional ownership and analyst recommendations.

Insider & Institutional Ownership

19.5% of Lument Finance Trust shares are held by institutional investors. 2.8% of Lument Finance Trust shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Risk & Volatility

Lument Finance Trust has a beta of 0.69, suggesting that its share price is 31% less volatile than the S&P 500. Comparatively, Pearl Diver Credit has a beta of 0.54, suggesting that its share price is 46% less volatile than the S&P 500.

Dividends

Lument Finance Trust pays an annual dividend of $0.16 per share and has a dividend yield of 12.4%. Pearl Diver Credit pays an annual dividend of $2.64 per share and has a dividend yield of 27.3%. Lument Finance Trust pays out 160.0% 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.

Earnings and Valuation

This table compares Lument Finance Trust and Pearl Diver Credit”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Lument Finance Trust	$122.13 million	0.55	$22.65 million	$0.10	12.90
Pearl Diver Credit	N/A	N/A	N/A	N/A	N/A

Lument Finance Trust has higher revenue and earnings than Pearl Diver Credit.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Lument Finance Trust	11.19%	10.20%	1.73%
Pearl Diver Credit	N/A	N/A	N/A

Analyst Recommendations

This is a summary of current ratings for Lument Finance Trust and Pearl Diver Credit, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Lument Finance Trust	1	1	0	0	1.50
Pearl Diver Credit	0	0	0	1	4.00

Pearl Diver Credit has a consensus target price of $19.50, suggesting a potential upside of 101.53%. Given Pearl Diver Credit’s stronger consensus rating and higher possible upside, analysts plainly believe Pearl Diver Credit is more favorable than Lument Finance Trust.

Summary

Lument Finance Trust beats Pearl Diver Credit on 8 of the 13 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 Pearl Diver Credit

Pearl Diver Credit Company Inc. is a newly organized, externally managed, non-diversified, closed-end management investment company. Its primary investment objective is to maximize its portfolio’s total return, with a secondary objective of generating high current income. Pearl Diver Credit Company Inc. is based in NEW YORK.