Head to Head Review: Lument Finance Trust (NYSE:LFT) & Finward Bancorp (NASDAQ:FNWD)

Finward Bancorp (NASDAQ:FNWD) and Lument Finance Trust (NYSE:LFT) are both small-cap finance companies, but which is the superior business? We will compare the two companies based on the strength of their analyst recommendations, profitability, risk, valuation, earnings, institutional ownership and dividends.

Dividends

Finward Bancorp pays an annual dividend of $0.48 per share and has a dividend yield of 1.4%. Lument Finance Trust pays an annual dividend of $0.16 per share and has a dividend yield of 15.3%. Finward Bancorp pays out 21.0% of its earnings in the form of a dividend. Lument Finance Trust pays out -123.1% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Lument Finance Trust has raised 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.

Valuation and Earnings

This table compares Finward Bancorp and Lument Finance Trust”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Finward Bancorp	$101.06 million	1.49	$8.09 million	$2.29	15.22
Lument Finance Trust	$79.00 million	0.69	-$2.74 million	($0.13)	-8.04

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Finward Bancorp	9.72%	5.92%	0.48%
Lument Finance Trust	-2.59%	5.65%	0.86%

Risk and Volatility

Finward Bancorp has a beta of 0.2, meaning that its share price is 80% less volatile than the S&P 500. Comparatively, Lument Finance Trust has a beta of 0.53, meaning that its share price is 47% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of current ratings and price targets for Finward Bancorp and Lument Finance Trust, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Finward Bancorp	0	0	2	0	3.00
Lument Finance Trust	1	0	0	0	1.00

Finward Bancorp currently has a consensus target price of $41.00, suggesting a potential upside of 17.63%. Given Finward Bancorp’s stronger consensus rating and higher possible upside, analysts clearly believe Finward Bancorp is more favorable than Lument Finance Trust.

Institutional and Insider Ownership

26.6% of Finward Bancorp shares are owned by institutional investors. Comparatively, 19.5% of Lument Finance Trust shares are owned by institutional investors. 13.1% of Finward Bancorp shares are owned by insiders. Comparatively, 3.3% of Lument Finance Trust shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Summary

Finward Bancorp beats Lument Finance Trust on 12 of the 17 factors compared between the two stocks.

About Finward Bancorp

Finward Bancorp operates as the holding company for Peoples Bank that provides various banking products and services. The company’s deposit products include non-interest- and interest-bearing demand accounts, savings accounts, money market deposit accounts, certificate accounts, and retirement savings plans. Its loan products portfolio comprises residential mortgage loans that enable borrowers to purchase existing homes, refinance existing homes, or construct new homes; construction loans primarily to individuals and contractors; commercial real estate loans; consumer loans to individuals for personal, household, or family purposes; home equity line of credit; home improvement loans and equity loans; commercial business loans; government loans; and loans to municipalities. The company also offers estate and retirement planning, custodial services, guardianships, IRA accounts, and investment agency accounts, as well as serves as the personal representative of estates, and acts as trustee for revocable and irrevocable trusts. In addition, it provides insurance and annuity investments to wealth management customers; holds real estate properties; and operates as a real estate investment trust. The company was formerly known as NorthWest Indiana Bancorp and changed its name to Finward Bancorp in May 2021. Finward Bancorp was founded in 1916 and is headquartered in Munster, Indiana.

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.