Critical Analysis: LM Funding America (NASDAQ:LMFA) & Mercurity Fintech (NASDAQ:MFH)

LM Funding America (NASDAQ:LMFA) and Mercurity Fintech (NASDAQ:MFH) are both small-cap finance companies, but which is the better investment? We will compare the two businesses based on the strength of their risk, dividends, profitability, earnings, analyst recommendations, institutional ownership and valuation.

Earnings and Valuation

This table compares LM Funding America and Mercurity Fintech”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
LM Funding America	$16.99 million	0.36	-$15.94 million	($5.10)	-0.23
Mercurity Fintech	$716,863.00	415.79	-$9.36 million	N/A	N/A

Mercurity Fintech has lower revenue, but higher earnings than LM Funding America.

Insider & Institutional Ownership

22.7% of LM Funding America shares are owned by institutional investors. Comparatively, 30.8% of Mercurity Fintech shares are owned by institutional investors. 36.1% of LM Funding America shares are owned by company insiders. Comparatively, 62.8% of Mercurity Fintech shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Analyst Recommendations

This is a summary of recent ratings and price targets for LM Funding America and Mercurity Fintech, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
LM Funding America	0	1	0	0	2.00
Mercurity Fintech	0	0	0	0	0.00

Profitability

This table compares LM Funding America and Mercurity Fintech’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
LM Funding America	-96.23%	-35.84%	-31.86%
Mercurity Fintech	N/A	N/A	N/A

Risk & Volatility

LM Funding America has a beta of 1.47, meaning that its share price is 47% more volatile than the S&P 500. Comparatively, Mercurity Fintech has a beta of 3.61, meaning that its share price is 261% more volatile than the S&P 500.

Summary

Mercurity Fintech beats LM Funding America on 8 of the 10 factors compared between the two stocks.

About LM Funding America

LM Funding America, Inc. operates as a cryptocurrency mining and specialty finance company. It operates through two segments, Specialty Finance and Mining Operations. The company also engages in Bitcoin mining operations; and provides funding to nonprofit community associations. The company was founded in 2008 and is based in Tampa, Florida.

About Mercurity Fintech

Mercurity Fintech Holding Inc. operates as a fintech company powered by blockchain. The company provides digital asset trading infrastructure solutions based on internet and blockchain technologies for cryptocurrency traders; and asset digitalization platform, which offers blockchain-based digitalization solutions for traditional assets, such as fiat currencies, bonds, and precious metals. It also offers cryptocurrency mining services that provides computing power to the mining pool; and digital consultation services, such as digital payment solutions, asset management, and online and traditional brokerage services. The company was formerly known as JMU Limited and changed its name to Mercurity Fintech Holding Inc. in April 2020. Mercurity Fintech Holding Inc. was incorporated in 2011 and is headquartered in New York, New York.