Critical Comparison: Angel Oak Mortgage REIT (NYSE:AOMR) & Chicago Atlantic Real Estate Finance (NASDAQ:REFI)

Chicago Atlantic Real Estate Finance (NASDAQ:REFI) and Angel Oak Mortgage REIT (NYSE:AOMR) are both small-cap finance companies, but which is the better stock? We will compare the two businesses based on the strength of their dividends, institutional ownership, risk, analyst recommendations, profitability, earnings and valuation.

Risk & Volatility

Chicago Atlantic Real Estate Finance has a beta of 0.26, indicating that its stock price is 74% less volatile than the S&P 500. Comparatively, Angel Oak Mortgage REIT has a beta of 1.28, indicating that its stock price is 28% more volatile than the S&P 500.

Dividends

Chicago Atlantic Real Estate Finance pays an annual dividend of $1.88 per share and has a dividend yield of 20.2%. Angel Oak Mortgage REIT pays an annual dividend of $1.28 per share and has a dividend yield of 17.8%. Chicago Atlantic Real Estate Finance pays out 137.2% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Angel Oak Mortgage REIT pays out 170.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Chicago Atlantic Real Estate Finance has increased its dividend for 1 consecutive years. Chicago Atlantic Real Estate Finance is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Ratings

This is a breakdown of current ratings for Chicago Atlantic Real Estate Finance and Angel Oak Mortgage REIT, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Chicago Atlantic Real Estate Finance	1	2	2	0	2.20
Angel Oak Mortgage REIT	1	2	3	0	2.33

Chicago Atlantic Real Estate Finance presently has a consensus price target of $15.33, suggesting a potential upside of 64.70%. Angel Oak Mortgage REIT has a consensus price target of $9.81, suggesting a potential upside of 36.38%. Given Chicago Atlantic Real Estate Finance’s higher possible upside, equities analysts plainly believe Chicago Atlantic Real Estate Finance is more favorable than Angel Oak Mortgage REIT.

Valuation & Earnings

This table compares Chicago Atlantic Real Estate Finance and Angel Oak Mortgage REIT”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Chicago Atlantic Real Estate Finance	$55.39 million	4.31	$36.01 million	$1.37	6.80
Angel Oak Mortgage REIT	$143.65 million	1.16	$44.02 million	$0.75	9.59

Angel Oak Mortgage REIT has higher revenue and earnings than Chicago Atlantic Real Estate Finance. Chicago Atlantic Real Estate Finance is trading at a lower price-to-earnings ratio than Angel Oak Mortgage REIT, indicating that it is currently the more affordable of the two stocks.

Insider & Institutional Ownership

25.5% of Chicago Atlantic Real Estate Finance shares are owned by institutional investors. Comparatively, 80.2% of Angel Oak Mortgage REIT shares are owned by institutional investors. 6.5% of Chicago Atlantic Real Estate Finance shares are owned by company insiders. Comparatively, 2.9% of Angel Oak Mortgage REIT shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Profitability

This table compares Chicago Atlantic Real Estate Finance and Angel Oak Mortgage REIT’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Chicago Atlantic Real Estate Finance	54.57%	11.53%	8.06%
Angel Oak Mortgage REIT	11.85%	7.74%	0.71%

Summary

Chicago Atlantic Real Estate Finance beats Angel Oak Mortgage REIT on 10 of the 17 factors compared between the two stocks.

About Chicago Atlantic Real Estate Finance

Chicago Atlantic Real Estate Finance, Inc. operates as a commercial real estate finance company in the United States. The company engages in originating, structuring, and investing in first mortgage loans and alternative structured financings secured by commercial real estate properties. Its portfolio primarily includes offers senior loans to state-licensed operators in the cannabis industry. The company has elected to be taxed as a real estate investment trust (REIT) and would not be subject to federal corporate income taxes if it distributes at least 90% of its taxable income to its stockholders. Chicago Atlantic Real Estate Finance, Inc. was incorporated in 2021 and is headquartered in Chicago, Illinois.

About Angel Oak Mortgage REIT

Angel Oak Mortgage REIT, Inc., a real estate finance company, focuses on acquiring and investing in first lien non- qualified mortgage loans and other mortgage-related assets in the United States mortgage market. It offers investment securities; residential mortgage loans; and commercial mortgage loans. 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. The company was incorporated in 2018 and is headquartered in Atlanta, Georgia.