ACRES Commercial Realty (NYSE:ACR) vs. AFC Gamma (NASDAQ:AFCG) Head-To-Head Analysis

AFC Gamma (NASDAQ:AFCG) and ACRES Commercial Realty (NYSE:ACR) are both small-cap finance companies, but which is the superior business? We will contrast the two businesses based on the strength of their earnings, profitability, institutional ownership, valuation, dividends, analyst recommendations and risk.

Profitability

This table compares AFC Gamma and ACRES Commercial Realty’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%
ACRES Commercial Realty	37.20%	5.85%	1.47%

Analyst Recommendations

This is a breakdown of recent ratings for AFC Gamma and ACRES Commercial Realty, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
AFC Gamma	1	2	0	0	1.67
ACRES Commercial Realty	1	1	2	0	2.25

AFC Gamma currently has a consensus target price of $4.50, indicating a potential upside of 57.89%. ACRES Commercial Realty has a consensus target price of $24.50, indicating a potential upside of 8.05%. Given AFC Gamma’s higher probable upside, analysts plainly believe AFC Gamma is more favorable than ACRES Commercial Realty.

Institutional and Insider Ownership

26.5% of AFC Gamma shares are owned by institutional investors. Comparatively, 40.0% of ACRES Commercial Realty shares are owned by institutional investors. 30.7% of AFC Gamma shares are owned by insiders. Comparatively, 3.9% of ACRES Commercial Realty shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Risk & Volatility

AFC Gamma has a beta of 0.77, suggesting that its share price is 23% less volatile than the S&P 500. Comparatively, ACRES Commercial Realty has a beta of 1.1, suggesting that its share price is 10% more volatile than the S&P 500.

Earnings and Valuation

This table compares AFC Gamma and ACRES Commercial Realty”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
AFC Gamma	$31.32 million	2.14	-$20.67 million	($0.95)	-3.00
ACRES Commercial Realty	$91.62 million	1.76	$21.32 million	$0.65	34.88

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

Summary

ACRES Commercial Realty beats AFC Gamma on 11 of the 14 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 ACRES Commercial Realty

ACRES Commercial Realty Corp., a real estate investment trust (REIT), focuses on the origination, holding, and management of commercial real estate mortgage loans and equity investments in commercial real estate property in the United States. It invests in commercial real estate-related assets, including floating-rate first mortgage loans, first priority interests in first mortgage loans, subordinated interests in first mortgage loans, mezzanine financing, preferred equity investments, 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. The company was formerly known as Exantas Capital Corp. and changed its name to ACRES Commercial Realty Corp. in February 2021. ACRES Commercial Realty Corp. was incorporated in 2005 and is based in Uniondale, New York.