Financial Contrast: AFC Gamma (NASDAQ:AFCG) & AG Mortgage Investment Trust (NYSE:MITT)

AFC Gamma (NASDAQ:AFCG) and AG Mortgage Investment Trust (NYSE:MITT) are both small-cap finance companies, but which is the better stock? We will compare the two companies based on the strength of their earnings, risk, institutional ownership, profitability, dividends, analyst recommendations and valuation.

Insider and Institutional Ownership

26.5% of AFC Gamma shares are owned by institutional investors. Comparatively, 27.3% of AG Mortgage Investment Trust shares are owned by institutional investors. 25.1% of AFC Gamma shares are owned by insiders. Comparatively, 3.3% of AG Mortgage Investment Trust shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Profitability

This table compares AFC Gamma and AG Mortgage Investment Trust’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
AFC Gamma	-70.17%	0.99%	0.62%
AG Mortgage Investment Trust	10.13%	14.42%	0.59%

Dividends

AFC Gamma pays an annual dividend of $0.53 per share and has a dividend yield of 20.3%. AG Mortgage Investment Trust pays an annual dividend of $0.96 per share and has a dividend yield of 12.7%. AFC Gamma pays out -55.8% of its earnings in the form of a dividend. AG Mortgage Investment Trust pays out 109.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. AG Mortgage Investment Trust has increased its dividend for 2 consecutive years. AFC Gamma is clearly the better dividend stock, given its higher yield and lower payout ratio.

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for AFC Gamma and AG Mortgage Investment Trust, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
AFC Gamma	2	1	0	0	1.33
AG Mortgage Investment Trust	0	3	5	0	2.63

AFC Gamma currently has a consensus price target of $4.50, suggesting a potential upside of 72.41%. AG Mortgage Investment Trust has a consensus price target of $9.25, suggesting a potential upside of 21.98%. Given AFC Gamma’s higher probable upside, research analysts plainly believe AFC Gamma is more favorable than AG Mortgage Investment Trust.

Volatility & Risk

AFC Gamma has a beta of 1.02, suggesting that its stock price is 2% more volatile than the S&P 500. Comparatively, AG Mortgage Investment Trust has a beta of 1.67, suggesting that its stock price is 67% more volatile than the S&P 500.

Earnings and Valuation

This table compares AFC Gamma and AG Mortgage Investment Trust”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
AFC Gamma	$31.32 million	1.96	-$20.67 million	($0.95)	-2.75
AG Mortgage Investment Trust	$75.67 million	3.18	$48.67 million	$0.88	8.62

AG Mortgage Investment Trust has higher revenue and earnings than AFC Gamma. AFC Gamma is trading at a lower price-to-earnings ratio than AG Mortgage Investment Trust, indicating that it is currently the more affordable of the two stocks.

Summary

AG Mortgage Investment Trust beats AFC Gamma on 12 of the 17 factors compared between the two stocks.

About AFC Gamma

AFC Gamma, Inc. originates, structures, underwrites, and invests in senior secured loans, and other various commercial real estate loans and debt securities for established companies operating in the cannabis industry. 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. The company 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. AFC Gamma, Inc. was incorporated in 2020 and is based in West Palm Beach, Florida.

About AG Mortgage Investment Trust

AG Mortgage Investment Trust, Inc. operates as a residential mortgage real estate investment trust in the United States. Its investment portfolio includes residential investments, including non-agency loans, agency-eligible loans, re-and non-performing loans, and non-agency residential mortgage-backed securities, as well as commercial loans and commercial mortgage-backed securities. 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. AG Mortgage Investment Trust, Inc. was incorporated in 2011 and is based in New York, New York.