Financial Analysis: Axos Financial (NYSE:AX) & Emergent Capital (OTCMKTS:EMGCQ)

Emergent Capital (OTCMKTS:EMGCQ) and Axos Financial (NYSE:AX) are both finance companies, but which is the better investment? We will contrast the two companies based on the strength of their institutional ownership, valuation, earnings, analyst recommendations, profitability, risk and dividends.

Profitability

This table compares Emergent Capital and Axos Financial’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Emergent Capital	N/A	N/A	N/A
Axos Financial	22.66%	16.98%	1.79%

Insider & Institutional Ownership

83.8% of Axos Financial shares are held by institutional investors. 48.9% of Emergent Capital shares are held by insiders. Comparatively, 4.9% of Axos Financial shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Earnings & Valuation

This table compares Emergent Capital and Axos Financial”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Emergent Capital	N/A	N/A	N/A	N/A	N/A
Axos Financial	$1.95 billion	2.89	$432.91 million	$7.89	12.57

Axos Financial has higher revenue and earnings than Emergent Capital.

Analyst Recommendations

This is a summary of current ratings and recommmendations for Emergent Capital and Axos Financial, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Emergent Capital	0	0	0	0	0.00
Axos Financial	0	1	6	1	3.00

Axos Financial has a consensus target price of $104.50, indicating a potential upside of 5.38%. Given Axos Financial’s stronger consensus rating and higher probable upside, analysts clearly believe Axos Financial is more favorable than Emergent Capital.

Summary

Axos Financial beats Emergent Capital on 9 of the 10 factors compared between the two stocks.

About Emergent Capital

Emergent Capital, Inc., a specialty finance company, invests in life settlements. As of August 31, 2020, it owned a portfolio of 500 life insurance policies. The company was formerly known as Imperial Holdings, Inc. and changed its name to Emergent Capital, Inc. in September 2015. The company was founded in 2006 and is based in Boca Raton, Florida. On October 15, 2020, Emergent Capital, Inc., along with its affiliate, filed a voluntary petition for reorganization under Chapter 11 in the U.S. Bankruptcy Court for the District of Delaware.

About Axos Financial

Axos Financial, Inc., together with its subsidiaries, provides consumer and business banking products in the United States. It operates through two segments, Banking Business and Securities Business. The company offers deposits products, including consumer and business checking, demand, savings, time deposit, money market, zero balance, and insured cash sweep accounts. It also provides residential single family, multifamily, and commercial mortgage loans; commercial real estate secured loans; commercial and industrial non-real estate, asset-backed, lines of credit, and term loans; automobile loans; fixed rate unsecured loans; and other loans, such as structure settlements, small business administration consumer loans, and securities-backed loans. In addition, the company offers ACH origination, wire transfer, commercial check printing, business bill pay and account transfer; remote deposit capture, mobile deposit, lockbox, merchant, and online payment portal; concierge banking; mobile and text message banking; and payment services, as well as debit and credit cards, and digital wallets. Further, it provides disclosed clearing services; back-office services, such as record keeping, trade reporting, accounting, general back-office support, securities and margin lending, reorganization assistance, and custody of securities; and financing to brokerage customers. The company was formerly known as BofI Holding, Inc. and changed its name to Axos Financial, Inc. in September 2018. Axos Financial, Inc. was incorporated in 1999 and is based in Las Vegas, Nevada.