Futu (NASDAQ:FUTU) and AFC Gamma (NASDAQ:AFCG) Financial Comparison

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

Institutional & Insider Ownership

26.5% of AFC Gamma shares are held by institutional investors. 35.2% of Futu 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 hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Futu	42.95%	28.20%	4.40%
AFC Gamma	15.64%	2.85%	1.50%

Volatility and Risk

Futu has a beta of 0.45, suggesting that its stock price is 55% 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.

Dividends

Futu pays an annual dividend of $2.55 per share and has a dividend yield of 2.4%. AFC Gamma pays an annual dividend of $0.20 per share and has a dividend yield of 6.6%. Futu pays out 25.2% 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.

Earnings & Valuation

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Futu	$2.94 billion	5.04	$1.46 billion	$10.10	10.45
AFC Gamma	$31.32 million	2.18	-$20.67 million	$0.19	15.84

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.

Analyst Recommendations

This is a summary of recent recommendations and price targets for Futu and AFC Gamma, as provided by MarketBeat.com.

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

Futu presently has a consensus price target of $139.91, indicating a potential upside of 32.60%. Given Futu’s stronger consensus rating and higher possible upside, equities research analysts plainly believe Futu is more favorable than AFC Gamma.

Summary

Futu beats AFC Gamma on 12 of the 16 factors compared between the two stocks.

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.

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.