Bank of New York Mellon (NYSE:BNY) & AFC Gamma (NASDAQ:AFCG) Critical Comparison

Bank of New York Mellon (NYSE:BNY) and AFC Gamma (NASDAQ:AFCG) are both finance companies, but which is the superior business? We will compare the two businesses based on the strength of their dividends, earnings, institutional ownership, risk, valuation, profitability and analyst recommendations.

Insider and Institutional Ownership

85.3% of Bank of New York Mellon shares are owned by institutional investors. Comparatively, 26.5% of AFC Gamma shares are owned by institutional investors. 0.2% of Bank of New York Mellon shares are owned by insiders. Comparatively, 30.7% of AFC Gamma shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Volatility and Risk

Bank of New York Mellon has a beta of 1.06, suggesting that its share price is 6% more volatile than the S&P 500. Comparatively, AFC Gamma has a beta of 0.99, suggesting that its share price is 1% less volatile than the S&P 500.

Analyst Recommendations

This is a summary of current recommendations and price targets for Bank of New York Mellon and AFC Gamma, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Bank of New York Mellon	0	6	7	1	2.64
AFC Gamma	1	1	0	0	1.50

Bank of New York Mellon presently has a consensus price target of $164.62, indicating a potential upside of 10.24%. Given Bank of New York Mellon’s stronger consensus rating and higher probable upside, research analysts plainly believe Bank of New York Mellon is more favorable than AFC Gamma.

Dividends

Bank of New York Mellon pays an annual dividend of $2.52 per share and has a dividend yield of 1.7%. AFC Gamma pays an annual dividend of $0.20 per share and has a dividend yield of 6.6%. Bank of New York Mellon pays out 27.8% of its earnings in the form of a dividend. AFC Gamma pays out 105.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Bank of New York Mellon has raised its dividend for 14 consecutive years.

Profitability

This table compares Bank of New York Mellon and AFC Gamma’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Bank of New York Mellon	16.32%	16.57%	1.29%
AFC Gamma	15.64%	2.85%	1.50%

Earnings & Valuation

This table compares Bank of New York Mellon and AFC Gamma”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Bank of New York Mellon	-$21.82 million	-4,644.01	$5.55 billion	$9.05	16.50
AFC Gamma	$31.32 million	2.19	-$20.67 million	$0.19	15.89

Bank of New York Mellon has higher earnings, but lower revenue than AFC Gamma. AFC Gamma is trading at a lower price-to-earnings ratio than Bank of New York Mellon, indicating that it is currently the more affordable of the two stocks.

Summary

Bank of New York Mellon beats AFC Gamma on 13 of the 18 factors compared between the two stocks.

About Bank of New York Mellon

The Bank of New York Mellon Corporation provides a range of financial products and services in the United States and internationally. The company operates through Securities Services, Market and Wealth Services, Investment and Wealth Management, and other segments. The Securities Services segment offers custody, trust and depositary, accounting, exchange-traded funds, middle-office solutions, transfer agency, services for private equity and real estate funds, foreign exchange, securities lending, liquidity/lending services, and data analytics. This segment also provides trustee, paying agency, fiduciary, escrow and other financial, issuer, and support services for brokers and investors. The Market and Wealth Services segment offers clearing and custody, investment, wealth and retirement solutions, technology and enterprise data management, trading, and prime brokerage services. This segment also provides integrated cash management solutions, including payments, foreign exchange, liquidity management, receivables processing and payables management, and trade finance and processing services. The Investment and Wealth Management segment offers investment management strategies and distribution of investment products, investment management, custody, wealth and estate planning, private banking, investment, and information management services. The Other segment engages in the provision of leasing, corporate treasury, derivative and other trading, corporate and bank-owned life insurance, renewable energy investment, and business exit services. It serves central banks and sovereigns, financial institutions, asset managers, insurance companies, corporations, local authorities and high net-worth individuals, and family offices. The Bank of New York Mellon Corporation was founded in 1784 and is headquartered in New York, New York.

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.