Reviewing AFC Gamma (NASDAQ:AFCG) & Virtu Financial (NYSE:VIRT)

AFC Gamma (NASDAQ:AFCG) and Virtu Financial (NYSE:VIRT) are both finance companies, but which is the better business? We will contrast the two businesses based on the strength of their valuation, analyst recommendations, earnings, profitability, institutional ownership, dividends and risk.

Analyst Recommendations

This is a summary of current recommendations and price targets for AFC Gamma and Virtu Financial, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
AFC Gamma	1	1	0	0	1.50
Virtu Financial	1	2	5	0	2.50

Virtu Financial has a consensus price target of $63.60, indicating a potential upside of 14.62%. Given Virtu Financial’s stronger consensus rating and higher probable upside, analysts clearly believe Virtu Financial is more favorable than AFC Gamma.

Institutional and Insider Ownership

26.5% of AFC Gamma shares are held by institutional investors. Comparatively, 45.8% of Virtu Financial shares are held by institutional investors. 30.7% of AFC Gamma shares are held by insiders. Comparatively, 46.8% of Virtu Financial shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Profitability

This table compares AFC Gamma and Virtu Financial’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%
Virtu Financial	13.50%	49.06%	4.28%

Volatility & Risk

AFC Gamma has a beta of 0.99, indicating that its share price is 1% less volatile than the S&P 500. Comparatively, Virtu Financial has a beta of 0.65, indicating that its share price is 35% less volatile than the S&P 500.

Dividends

AFC Gamma pays an annual dividend of $0.20 per share and has a dividend yield of 6.8%. Virtu Financial pays an annual dividend of $0.96 per share and has a dividend yield of 1.7%. 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. Virtu Financial pays out 15.9% of its earnings in the form of a dividend.

Valuation & Earnings

This table compares AFC Gamma and Virtu Financial”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
AFC Gamma	$31.32 million	2.14	-$20.67 million	$0.19	15.58
Virtu Financial	$3.63 billion	2.37	$468.36 million	$6.02	9.22

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

Summary

Virtu Financial 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 Virtu Financial

Virtu Financial, Inc., a financial services company, provides data, analytics, and connectivity products to clients worldwide. The company operates in two segments, Market Making and Execution Services. Its product suite includes offerings in execution, liquidity sourcing, analytics and broker-neutral, and multi-dealer platforms in workflow technology. The company’s solutions enable clients to trade on various venues across countries and in multiple asset classes, including global equities, ETFs, foreign exchange, futures, fixed income, cryptocurrencies, and other commodities. Its analytics platform provides a range of pre- and post-trade services, data products, and compliance tools for clients to invest, trade, and manage risk across markets. Virtu Financial, Inc. was founded in 2008 and is headquartered in New York, New York.