Reviewing AG Mortgage Investment Trust (NYSE:MITT) and AFC Gamma (NASDAQ:AFCG)

AFC Gamma (NASDAQ:AFCG) and AG Mortgage Investment Trust (NYSE:MITT) are both small-cap finance companies, but which is the superior investment? We will compare the two companies based on the strength of their earnings, valuation, dividends, risk, institutional ownership, analyst recommendations and profitability.

Analyst Ratings

This is a summary of recent ratings and target prices for AFC Gamma and AG Mortgage Investment Trust, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
AFC Gamma	2	1	0	0	1.33
AG Mortgage Investment Trust	0	3	5	0	2.63

AFC Gamma presently has a consensus price target of $4.50, indicating a potential upside of 67.91%. AG Mortgage Investment Trust has a consensus price target of $9.25, indicating a potential upside of 19.79%. Given AFC Gamma’s higher probable upside, analysts clearly believe AFC Gamma is more favorable than AG Mortgage Investment Trust.

Institutional & Insider Ownership

26.5% of AFC Gamma shares are held by institutional investors. Comparatively, 27.3% of AG Mortgage Investment Trust shares are held by institutional investors. 25.1% of AFC Gamma shares are held by company insiders. Comparatively, 3.2% of AG Mortgage Investment Trust shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Volatility & Risk

AFC Gamma has a beta of 1.02, suggesting that its stock price is 2% more volatile than the S&P 500. Comparatively, AG Mortgage Investment Trust has a beta of 1.67, suggesting that its stock price is 67% more volatile than the S&P 500.

Valuation and Earnings

This table compares AFC Gamma and AG Mortgage Investment Trust”s top-line 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	2.01	-$20.67 million	($0.95)	-2.82
AG Mortgage Investment Trust	$480.33 million	0.51	$48.67 million	$0.88	8.78

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

Profitability

This table compares AFC Gamma and AG Mortgage Investment Trust’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
AFC Gamma	-70.17%	0.99%	0.62%
AG Mortgage Investment Trust	10.13%	14.42%	0.59%

Dividends

AFC Gamma pays an annual dividend of $0.53 per share and has a dividend yield of 19.8%. AG Mortgage Investment Trust pays an annual dividend of $0.92 per share and has a dividend yield of 11.9%. AFC Gamma pays out -55.8% of its earnings in the form of a dividend. AG Mortgage Investment Trust pays out 104.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. AG Mortgage Investment Trust has increased its dividend for 2 consecutive years. AFC Gamma is clearly the better dividend stock, given its higher yield and lower payout ratio.

Summary

AG Mortgage Investment Trust beats AFC Gamma on 11 of the 17 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 AG Mortgage Investment Trust

AG Mortgage Investment Trust, Inc. operates as a residential mortgage real estate investment trust in the United States. Its investment portfolio includes residential investments, including non-agency loans, agency-eligible loans, re-and non-performing loans, and non-agency residential mortgage-backed securities, as well as commercial loans and commercial mortgage-backed securities. The company qualifies as a real estate investment trust for federal income tax purposes. It generally would not be subject to federal corporate income taxes if it distributes at least 90% of its taxable income to its stockholders. AG Mortgage Investment Trust, Inc. was incorporated in 2011 and is based in New York, New York.