AFC Gamma (NASDAQ:AFCG – Get Rating) and Angel Oak Mortgage (NYSE:AOMR – Get Rating) are both small-cap finance companies, but which is the better investment? We will compare the two companies based on the strength of their analyst recommendations, valuation, dividends, profitability, earnings, institutional ownership and risk.
Analyst Recommendations
This is a summary of current ratings and recommmendations for AFC Gamma and Angel Oak Mortgage, as reported by MarketBeat.
Get AFC Gamma alerts:| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| AFC Gamma | 0 | 0 | 1 | 0 | 3.00 |
| Angel Oak Mortgage | 0 | 2 | 2 | 0 | 2.50 |
AFC Gamma presently has a consensus price target of $22.83, indicating a potential upside of 36.48%. Angel Oak Mortgage has a consensus price target of $16.17, indicating a potential upside of 31.12%. Given AFC Gamma's stronger consensus rating and higher probable upside, equities research analysts clearly believe AFC Gamma is more favorable than Angel Oak Mortgage.
Dividends
AFC Gamma pays an annual dividend of $2.24 per share and has a dividend yield of 13.4%. Angel Oak Mortgage pays an annual dividend of $1.80 per share and has a dividend yield of 14.6%. AFC Gamma pays out 112.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Angel Oak Mortgage pays out -51.0% of its earnings in the form of a dividend. Angel Oak Mortgage is clearly the better dividend stock, given its higher yield and lower payout ratio.Insider & Institutional Ownership
40.7% of AFC Gamma shares are owned by institutional investors. Comparatively, 84.3% of Angel Oak Mortgage shares are owned by institutional investors. 28.0% of AFC Gamma shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.
Earnings & Valuation
This table compares AFC Gamma and Angel Oak Mortgage's revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| AFC Gamma | $38.14 million | 8.71 | $21.00 million | $1.99 | 8.41 |
| Angel Oak Mortgage | $60.56 million | 5.08 | $21.11 million | ($3.53) | -3.49 |
Angel Oak Mortgage has higher revenue and earnings than AFC Gamma. Angel Oak Mortgage is trading at a lower price-to-earnings ratio than AFC Gamma, indicating that it is currently the more affordable of the two stocks.
Risk and Volatility
AFC Gamma has a beta of 1.06, meaning that its share price is 6% more volatile than the S&P 500. Comparatively, Angel Oak Mortgage has a beta of 0.71, meaning that its share price is 29% less volatile than the S&P 500.
Profitability
This table compares AFC Gamma and Angel Oak Mortgage's net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| AFC Gamma | 56.14% | 13.48% | 9.80% |
| Angel Oak Mortgage | -90.64% | 18.86% | 3.50% |
Summary
AFC Gamma beats Angel Oak Mortgage on 9 of the 16 factors compared between the two stocks.
About AFC Gamma
(Get Rating)
AFC Gamma, Inc. originates, structures, underwrites, and invests in senior secured loans, and other types of loans and debt securities for established companies operating in the cannabis industry in states that have legalized medicinal and/or adult use cannabis. It primarily originates loans structured as senior loans secured by real estate, equipment, and licenses and/or other assets of the loan parties to the extent permitted by applicable laws and the regulations governing such loan parties. AFC Gamma, Inc. has elected and qualified to be taxed as a real estate investment trust for the United States federal income tax purposes under the Internal Revenue Code of 1986. The company was incorporated in 2020 and is based in West Palm Beach, Florida.
About Angel Oak Mortgage
(Get Rating)
Angel Oak Mortgage, Inc., a real estate finance company, focuses on acquiring and investing in first lien non- qualified mortgage loans and other mortgage-related assets in the United States mortgage market. The company qualifies as a real estate investment trust for federal income tax purposes. It generally would not be subject to federal corporate income taxes if it distributes at least 90% of its taxable income to its stockholders. Angel Oak Mortgage, Inc. was incorporated in 2018 and is headquartered in Atlanta, Georgia.
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