Critical Analysis: Safe and Green Development (NASDAQ:SGD) and AFC Gamma (NASDAQ:AFCG)

AFC Gamma (NASDAQ:AFCG) and Safe and Green Development (NASDAQ:SGD) are both small-cap finance companies, but which is the better investment? We will compare the two businesses based on the strength of their valuation, profitability, risk, institutional ownership, analyst recommendations, earnings and dividends.

Analyst Recommendations

This is a summary of current ratings and price targets for AFC Gamma and Safe and Green Development, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
AFC Gamma	0	2	2	1	2.80
Safe and Green Development	0	0	0	0	0.00

AFC Gamma presently has a consensus price target of $11.67, indicating a potential upside of 35.19%. Given AFC Gamma’s stronger consensus rating and higher probable upside, research analysts plainly believe AFC Gamma is more favorable than Safe and Green Development.

Valuation & Earnings

This table compares AFC Gamma and Safe and Green Development”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
AFC Gamma	$36.79 million	5.15	$20.95 million	$0.40	21.58
Safe and Green Development	$173,188.00	23.70	-$4.20 million	N/A	N/A

AFC Gamma has higher revenue and earnings than Safe and Green Development.

Risk and Volatility

AFC Gamma has a beta of 1.03, suggesting that its share price is 3% more volatile than the S&P 500. Comparatively, Safe and Green Development has a beta of 6.72, suggesting that its share price is 572% more volatile than the S&P 500.

Profitability

This table compares AFC Gamma and Safe and Green Development’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
AFC Gamma	13.69%	12.93%	8.42%
Safe and Green Development	N/A	-492.68%	-76.18%

Institutional & Insider Ownership

26.5% of AFC Gamma shares are held by institutional investors. Comparatively, 2.6% of Safe and Green Development shares are held by institutional investors. 26.2% of AFC Gamma shares are held by company insiders. Comparatively, 9.6% of Safe and Green Development shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Summary

AFC Gamma beats Safe and Green Development on 11 of the 13 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 Safe and Green Development

Safe and Green Development Corporation operates as a real estate development company. It focuses on building single and multifamily projects. The company was formerly known as SGB Development Corp. and changed its name to Safe and Green Development Corporation in December 2022. The company was incorporated in 2021 and is based in Miami, Florida. Safe and Green Development Corporation is a subsidiary of Safe & Green Holdings Corp.