Chicago Atlantic Real Estate Finance (NASDAQ:REFI) and Euronet Worldwide (NASDAQ:EEFT) have drawn attention as finance stocks, but a detailed comparison reveals that Euronet Worldwide has the edge. This article examines their earnings strength, institutional ownership, dividends, valuation, analyst recommendations, profitability, and risk factors.
Valuation and Earnings Analysis
In evaluating the two companies, Euronet Worldwide demonstrates a stronger financial position. Chicago Atlantic Real Estate Finance currently holds a consensus target price of $18.00, indicating a potential upside of 41.90%. In contrast, Euronet Worldwide boasts a higher consensus target price of $117.60, with a potential upside of 59.42%. Analysts suggest that this higher upside reflects a more favorable outlook for Euronet compared to Chicago Atlantic.
Institutional Ownership and Insider Insights
The ownership structure presents a stark contrast between the two firms. Approximately 25.5% of Chicago Atlantic’s shares are held by institutional investors, while a substantial 91.6% of Euronet’s shares are owned by institutional investors. This strong institutional ownership often indicates a belief among major financial players in the long-term growth prospects of the stock. Insider ownership also differs: 8.3% of Chicago Atlantic’s shares belong to company insiders, compared to 11.2% for Euronet Worldwide.
Profitability metrics further illustrate Euronet Worldwide’s advantages. The two companies differ in net margins, return on equity, and return on assets, with Euronet generally outperforming Chicago Atlantic across these essential profitability indicators.
Volatility and Risk Assessment
When assessing risk, Chicago Atlantic Real Estate Finance has a beta of 0.22, indicating that its share price is 78% less volatile than the S&P 500. Euronet Worldwide, on the other hand, has a beta of 0.86, suggesting it is 14% less volatile than the broader market. While this indicates that Chicago Atlantic may offer more stability, it also suggests less potential for high returns.
Overall, Euronet Worldwide excels in 11 out of 14 key financial metrics compared to Chicago Atlantic, showcasing its strengths in the finance sector.
Company Profiles
Chicago Atlantic Real Estate Finance, Inc., founded in 2021 and headquartered in Chicago, Illinois, operates as a commercial real estate finance company. It focuses on originating, structuring, and investing in first mortgage loans primarily for state-licensed operators in the cannabis industry. The firm has opted to be taxed as a real estate investment trust (REIT), allowing it to avoid federal corporate income taxes by distributing at least 90% of its taxable income to shareholders.
Conversely, Euronet Worldwide, Inc., established in 1994 and headquartered in Leawood, Kansas, provides payment and transaction processing solutions on a global scale. The company operates through three main segments: Electronic Fund Transfer Processing, epay, and Money Transfer. Its services range from ATM management to prepaid mobile airtime distribution, highlighting its expansive reach in financial transactions.
In summary, while both companies operate in the finance sector, Euronet Worldwide’s stronger financial metrics and institutional backing position it as the more favorable investment choice over Chicago Atlantic Real Estate Finance. Investors should consider these insights when making informed decisions in the finance market.
