Head to Head Contrast: Blue Owl Capital (NYSE:OBDC) & AFC Gamma (NASDAQ:AFCG)

AFC Gamma (NASDAQ:AFCG) and Blue Owl Capital (NYSE:OBDC) are both finance companies, but which is the superior stock? We will compare the two companies based on the strength of their profitability, risk, valuation, dividends, analyst recommendations, earnings and institutional ownership.

Valuation & Earnings

This table compares AFC Gamma and Blue Owl Capital”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
AFC Gamma	$24.82 million	3.30	-$20.67 million	$0.19	19.01
Blue Owl Capital	$1.85 billion	2.79	$800.36 million	$0.56	18.72

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

Analyst Recommendations

This is a breakdown of current recommendations and price targets for AFC Gamma and Blue Owl Capital, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
AFC Gamma	1	1	0	0	1.50
Blue Owl Capital	0	3	4	1	2.75

Blue Owl Capital has a consensus price target of $13.00, suggesting a potential upside of 23.99%. Given Blue Owl Capital’s stronger consensus rating and higher possible upside, analysts plainly believe Blue Owl Capital is more favorable than AFC Gamma.

Dividends

AFC Gamma pays an annual dividend of $0.20 per share and has a dividend yield of 5.5%. Blue Owl Capital pays an annual dividend of $0.08 per share and has a dividend yield of 0.8%. AFC Gamma pays out 105.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Blue Owl Capital pays out 14.3% of its earnings in the form of a dividend. Blue Owl Capital has increased its dividend for 2 consecutive years.

Risk & Volatility

AFC Gamma has a beta of 0.95, meaning that its stock price is 5% less volatile than the S&P 500. Comparatively, Blue Owl Capital has a beta of 0.63, meaning that its stock price is 37% less volatile than the S&P 500.

Insider & Institutional Ownership

26.5% of AFC Gamma shares are owned by institutional investors. Comparatively, 42.8% of Blue Owl Capital shares are owned by institutional investors. 30.7% of AFC Gamma shares are owned by company insiders. Comparatively, 0.1% of Blue Owl Capital shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Profitability

This table compares AFC Gamma and Blue Owl Capital’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
AFC Gamma	15.64%	2.85%	1.50%
Blue Owl Capital	16.99%	9.49%	4.19%

Summary

Blue Owl Capital beats AFC Gamma on 13 of the 18 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 Blue Owl Capital

Blue Owl Capital Corporation is a business development company. It specializes in direct and fund of fund investments. The fund makes investments in senior secured, direct lending or unsecured loans, subordinated loans or mezzanine loans and also considers equity-related securities including warrants and preferred stocks also pursues preferred equity investments, first lien, unitranche, and second lien term loans and common equity investments. Within private equity, it seeks to invest in growth, acquisitions, market or product expansion, refinancings and recapitalizations. It seeks to invest in middle market and upper middle market companies based in the United States, with EBITDA between $10 million and $250 million annually and/or annual revenue of $50 million and $2.5 billion at the time of investment. It seeks to invest in investments with maturities typically between three and ten years. It seeks to make investments generally ranging in size between $20 million and $250 million.