Federal Agricultural Mortgage (NYSE:AGM) & Affirm (NASDAQ:AFRM) Critical Contrast

Affirm (NASDAQ:AFRM) and Federal Agricultural Mortgage (NYSE:AGM) are both finance companies, but which is the better investment? We will contrast the two businesses based on the strength of their profitability, risk, earnings, valuation, analyst recommendations, dividends and institutional ownership.

Risk & Volatility

Affirm has a beta of 3.74, indicating that its stock price is 274% more volatile than the S&P 500. Comparatively, Federal Agricultural Mortgage has a beta of 1.02, indicating that its stock price is 2% more volatile than the S&P 500.

Insider and Institutional Ownership

69.3% of Affirm shares are held by institutional investors. Comparatively, 68.0% of Federal Agricultural Mortgage shares are held by institutional investors. 11.0% of Affirm shares are held by company insiders. Comparatively, 1.9% of Federal Agricultural Mortgage shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Analyst Recommendations

This is a summary of current recommendations and price targets for Affirm and Federal Agricultural Mortgage, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Affirm	0	7	25	1	2.82
Federal Agricultural Mortgage	0	2	1	0	2.33

Affirm currently has a consensus target price of $96.81, suggesting a potential upside of 42.14%. Federal Agricultural Mortgage has a consensus target price of $255.00, suggesting a potential upside of 41.52%. Given Affirm’s stronger consensus rating and higher possible upside, equities analysts plainly believe Affirm is more favorable than Federal Agricultural Mortgage.

Profitability

This table compares Affirm and Federal Agricultural Mortgage’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Affirm	43.86%	47.13%	14.42%
Federal Agricultural Mortgage	28.88%	19.22%	0.63%

Valuation & Earnings

This table compares Affirm and Federal Agricultural Mortgage”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Affirm	$4.26 billion	5.39	$1.93 billion	$5.76	11.82
Federal Agricultural Mortgage	$410.30 million	4.76	$207.41 million	$18.90	9.53

Affirm has higher revenue and earnings than Federal Agricultural Mortgage. Federal Agricultural Mortgage is trading at a lower price-to-earnings ratio than Affirm, indicating that it is currently the more affordable of the two stocks.

Summary

Affirm beats Federal Agricultural Mortgage on 14 of the 15 factors compared between the two stocks.

About Affirm

Affirm Holdings, Inc. operates a platform for digital and mobile-first commerce in the United States, Canada, and internationally. The company's platform includes point-of-sale payment solution for consumers, merchant commerce solutions, and a consumer-focused app. Its commerce platform, agreements with originating banks, and capital markets partners enables consumers to pay for a purchase over time with terms ranging up to 60 months. The company has active merchants covering small businesses, large enterprises, direct-to-consumer brands, brick-and-mortar stores, and companies with an omni-channel presence. Its merchants represent a range of industries, including sporting goods and outdoors, furniture and homewares, travel and ticketing, apparel, accessories, consumer electronics, and jewelry. Affirm Holdings, Inc. was founded in 2012 and is headquartered in San Francisco, California.

About Federal Agricultural Mortgage

Federal Agricultural Mortgage Corporation provides a secondary market for various loans made to borrowers in the United States. It operates through four segments: Corporate AgFinance, Farm & Ranch, Rural Utilities, and Renewable Energy. The company’s Agricultural Finance line of business engages in purchasing and retaining eligible loans and securities; guaranteeing the payment of principal and interest on securities that represent interests in or obligations secured by pools of eligible loans; servicing eligible loans; and issuing LTSPCs for eligible loans. Its Rural Infrastructure Finance line of business is involved in the purchase of rural utilities loans and renewable energy loans and guarantees of securities backed by loans, as well as LTSPCs for pools of eligible rural utilities loans; by loans for electric or telecommunications facilities by lenders organized as cooperatives to borrowers; and other financial institutions that are secured by pools of eligible loans. Federal Agricultural Mortgage Corporation was incorporated in 1987 and is headquartered in Washington, the District of Columbia.