AFC Gamma (NASDAQ:AFCG – Get Free Report) and UBS Group (NYSE:UBS – Get Free Report) are both finance companies, but which is the better investment? We will contrast the two companies based on the strength of their dividends, institutional ownership, analyst recommendations, valuation, profitability, earnings and risk.
Dividends
AFC Gamma pays an annual dividend of $0.20 per share and has a dividend yield of 5.7%. UBS Group pays an annual dividend of $0.35 per share and has a dividend yield of 0.7%. AFC Gamma pays out 19.2% of its earnings in the form of a dividend. UBS Group pays out 11.6% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. UBS Group has increased its dividend for 5 consecutive years.
Analyst Ratings
This is a summary of current ratings and price targets for AFC Gamma and UBS Group, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| AFC Gamma | 1 | 1 | 0 | 0 | 1.50 |
| UBS Group | 2 | 4 | 6 | 0 | 2.33 |
UBS Group has a consensus target price of $60.30, suggesting a potential upside of 22.11%. Given UBS Group’s stronger consensus rating and higher probable upside, analysts clearly believe UBS Group is more favorable than AFC Gamma.
Profitability
This table compares AFC Gamma and UBS Group’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| AFC Gamma | 71.50% | 4.57% | 2.31% |
| UBS Group | 13.36% | 10.77% | 0.58% |
Insider and Institutional Ownership
26.5% of AFC Gamma shares are held by institutional investors. 30.7% of AFC Gamma shares are held by insiders. Comparatively, 1.0% of UBS Group shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.
Earnings and Valuation
This table compares AFC Gamma and UBS Group”s revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| AFC Gamma | $36.91 million | 2.13 | -$20.67 million | $1.04 | 3.37 |
| UBS Group | $52.28 billion | 2.95 | $7.77 billion | $3.03 | 16.30 |
UBS Group has higher revenue and earnings than AFC Gamma. AFC Gamma is trading at a lower price-to-earnings ratio than UBS Group, indicating that it is currently the more affordable of the two stocks.
Risk & Volatility
AFC Gamma has a beta of 1, indicating that its share price has a similar volatility profile to the S&P 500.Comparatively, UBS Group has a beta of 1.19, indicating that its share price is 19% more volatile than the S&P 500.
Summary
UBS Group beats AFC Gamma on 12 of the 17 factors compared between the two stocks.
About AFC Gamma
AFC Gamma, Inc. is a specialty finance company focused primarily on providing institutional debt financing to businesses operating in the regulated cannabis industry. The company has historically targeted established cannabis operators and other participants in the industry that may have limited access to traditional bank financing. Its financing activities have included senior secured loans, mortgage-backed loans and other structured debt arrangements. Borrowers may use these funds to support the acquisition, development or expansion of cannabis cultivation, processing, manufacturing and retail facilities, as well as related working-capital and corporate needs.
About UBS Group
UBS Group AG is a Swiss financial services company providing wealth management, banking, asset management and investment banking services to individuals, businesses, institutions and governments. It has a strong presence in Switzerland and serves clients in markets around the world. The company’s businesses include Global Wealth Management, Swiss Personal & Corporate Banking, Asset Management and the Investment Bank. Its services include financial planning and investment advice, lending and deposit products, portfolio and fund management, and capital markets and advisory services.
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