AFC Gamma (NASDAQ:AFCG) vs. Futu (NASDAQ:FUTU) Head-To-Head Analysis

AFC Gamma (NASDAQ:AFCG) and Futu (NASDAQ:FUTU) are both finance companies, but which is the better investment? We will compare the two businesses based on the strength of their dividends, risk, analyst recommendations, institutional ownership, profitability, valuation and earnings.

Valuation and Earnings

This table compares AFC Gamma and Futu”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
AFC Gamma	$31.32 million	2.16	-$20.67 million	$0.19	15.68
Futu	$2.94 billion	4.84	$1.46 billion	$10.10	10.03

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

Profitability

This table compares AFC Gamma and Futu’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%
Futu	42.95%	28.20%	4.40%

Volatility & Risk

AFC Gamma has a beta of 0.99, indicating that its stock price is 1% less volatile than the S&P 500. Comparatively, Futu has a beta of 0.45, indicating that its stock price is 55% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of current recommendations for AFC Gamma and Futu, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
AFC Gamma	1	1	0	0	1.50
Futu	0	4	2	0	2.33

Futu has a consensus target price of $139.91, indicating a potential upside of 38.06%. Given Futu’s stronger consensus rating and higher possible upside, analysts plainly believe Futu is more favorable than AFC Gamma.

Dividends

AFC Gamma pays an annual dividend of $0.20 per share and has a dividend yield of 6.7%. Futu pays an annual dividend of $2.55 per share and has a dividend yield of 2.5%. 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. Futu pays out 25.2% of its earnings in the form of a dividend.

Insider & Institutional Ownership

26.5% of AFC Gamma shares are held by institutional investors. 30.7% of AFC Gamma shares are held by company insiders. Comparatively, 35.2% of Futu shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Summary

Futu beats AFC Gamma on 12 of the 16 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 Futu

Futu Holdings Limited provides digitalized securities brokerage and wealth management product distribution service in Hong Kong and internationally. It offers online financial services, including securities and derivative trades brokerage, margin financing and fund distribution services through its Futubull and Moomoo digital platforms. The company also provides financial information and online community services; online wealth management services under the Money Plus brand name through its Futubull and moomoo platforms, which provides its client access to mutual funds, private funds, bonds, structured products, and other wealth management products; market data and information services; and NiuNiu Community, which serves as an open forum for users and clients to share insights, ask questions, and exchange ideas. Futu Holdings Limited was founded in 2007 and is headquartered in Sheung Wan, Hong Kong.