Comparing Virtu Financial (NYSE:VIRT) and AFC Gamma (NASDAQ:AFCG)

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

Valuation & Earnings

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Virtu Financial	$4.08 billion	2.17	$468.36 million	$6.02	9.49
AFC Gamma	$31.32 million	2.18	-$20.67 million	$0.19	15.84

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.

Dividends

Virtu Financial pays an annual dividend of $0.96 per share and has a dividend yield of 1.7%. AFC Gamma pays an annual dividend of $0.20 per share and has a dividend yield of 6.6%. Virtu Financial pays out 15.9% of its earnings in the form of a dividend. 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.

Risk and Volatility

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

Analyst Recommendations

This is a breakdown of current ratings and target prices for Virtu Financial and AFC Gamma, as reported by MarketBeat.com.

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

Virtu Financial presently has a consensus target price of $63.60, suggesting a potential upside of 11.35%. Given Virtu Financial’s stronger consensus rating and higher possible upside, research analysts plainly believe Virtu Financial is more favorable than AFC Gamma.

Institutional and Insider Ownership

45.8% of Virtu Financial shares are held by institutional investors. Comparatively, 26.5% of AFC Gamma shares are held by institutional investors. 46.8% of Virtu Financial shares are held by company insiders. Comparatively, 30.7% of AFC Gamma shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Profitability

This table compares Virtu Financial and AFC Gamma’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Virtu Financial	13.50%	49.06%	4.28%
AFC Gamma	15.64%	2.85%	1.50%

Summary

Virtu Financial beats AFC Gamma on 11 of the 16 factors compared between the two stocks.

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.

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.