Angel Oak Mortgage (NYSE:AOMR – Get Rating) and AFC Gamma (NASDAQ:AFCG – Get Rating) are both small-cap finance companies, but which is the better stock? We will contrast the two businesses based on the strength of their risk, dividends, earnings, profitability, analyst recommendations, institutional ownership and valuation.
Dividends
Angel Oak Mortgage pays an annual dividend of $1.80 per share and has a dividend yield of 15.0%. AFC Gamma pays an annual dividend of $2.24 per share and has a dividend yield of 14.6%. Angel Oak Mortgage pays out -51.0% of its earnings in the form of a dividend. 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 is clearly the better dividend stock, given its higher yield and lower payout ratio.
Get Angel Oak Mortgage alerts:Earnings & Valuation
This table compares Angel Oak Mortgage and AFC Gamma's top-line revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Angel Oak Mortgage | $60.56 million | 4.93 | $21.11 million | ($3.53) | -3.39 |
| AFC Gamma | $38.14 million | 7.97 | $21.00 million | $1.99 | 7.69 |
Profitability
This table compares Angel Oak Mortgage and AFC Gamma's net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Angel Oak Mortgage | -90.64% | 19.96% | 3.26% |
| AFC Gamma | 56.14% | 13.48% | 9.80% |
Risk & Volatility
Angel Oak Mortgage has a beta of 0.71, suggesting that its share price is 29% less volatile than the S&P 500. Comparatively, AFC Gamma has a beta of 1.06, suggesting that its share price is 6% more volatile than the S&P 500.
Insider and Institutional Ownership
84.3% of Angel Oak Mortgage shares are held by institutional investors. Comparatively, 40.7% of AFC Gamma shares are held by institutional investors. 28.0% of AFC Gamma shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.
Analyst Recommendations
This is a breakdown of current ratings and recommmendations for Angel Oak Mortgage and AFC Gamma, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Angel Oak Mortgage | 0 | 2 | 2 | 0 | 2.50 |
| AFC Gamma | 0 | 0 | 1 | 0 | 3.00 |
Angel Oak Mortgage presently has a consensus target price of $16.17, indicating a potential upside of 34.95%. AFC Gamma has a consensus target price of $22.83, indicating a potential upside of 49.24%. Given AFC Gamma's stronger consensus rating and higher probable upside, analysts plainly believe AFC Gamma is more favorable than Angel Oak Mortgage.
Summary
AFC Gamma beats Angel Oak Mortgage on 9 of the 16 factors compared between the two stocks.
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.
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.
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