Critical Contrast: Sparta Commercial Services (OTCMKTS:SRCO) versus Axos Financial (NYSE:AX)

Axos Financial (NYSE:AX) and Sparta Commercial Services (OTCMKTS:SRCO) are both finance companies, but which is the superior stock? We will contrast the two companies based on the strength of their earnings, profitability, analyst recommendations, dividends, institutional ownership, valuation and risk.

Earnings & Valuation

This table compares Axos Financial and Sparta Commercial Services”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Axos Financial	$1.40 billion	3.56	$432.91 million	$8.23	10.68
Sparta Commercial Services	$240,000.00	15.86	-$2.12 million	($0.04)	-1.78

Axos Financial has higher revenue and earnings than Sparta Commercial Services. Sparta Commercial Services is trading at a lower price-to-earnings ratio than Axos Financial, indicating that it is currently the more affordable of the two stocks.

Institutional & Insider Ownership

83.8% of Axos Financial shares are owned by institutional investors. 4.9% of Axos Financial shares are owned by company insiders. Comparatively, 0.5% of Sparta Commercial Services shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Volatility & Risk

Axos Financial has a beta of 1.3, suggesting that its stock price is 30% more volatile than the S&P 500. Comparatively, Sparta Commercial Services has a beta of 0.06, suggesting that its stock price is 94% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent recommendations for Axos Financial and Sparta Commercial Services, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Axos Financial	0	2	4	1	2.86
Sparta Commercial Services	0	0	0	0	0.00

Axos Financial presently has a consensus price target of $109.40, suggesting a potential upside of 24.46%. Given Axos Financial’s stronger consensus rating and higher possible upside, equities analysts clearly believe Axos Financial is more favorable than Sparta Commercial Services.

Profitability

This table compares Axos Financial and Sparta Commercial Services’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Axos Financial	22.53%	16.48%	1.72%
Sparta Commercial Services	-490.70%	N/A	-204.88%

Summary

Axos Financial beats Sparta Commercial Services on 14 of the 15 factors compared between the two stocks.

About Axos Financial

Axos Financial, Inc., together with its subsidiaries, provides consumer and business banking products in the United States. It operates through two segments, Banking Business and Securities Business. The company offers deposits products, including consumer and business checking, demand, savings, time deposit, money market, zero balance, and insured cash sweep accounts. It also provides residential single family, multifamily, and commercial mortgage loans; commercial real estate secured loans; commercial and industrial non-real estate, asset-backed, lines of credit, and term loans; automobile loans; fixed rate unsecured loans; and other loans, such as structure settlements, small business administration consumer loans, and securities-backed loans. In addition, the company offers ACH origination, wire transfer, commercial check printing, business bill pay and account transfer; remote deposit capture, mobile deposit, lockbox, merchant, and online payment portal; concierge banking; mobile and text message banking; and payment services, as well as debit and credit cards, and digital wallets. Further, it provides disclosed clearing services; back-office services, such as record keeping, trade reporting, accounting, general back-office support, securities and margin lending, reorganization assistance, and custody of securities; and financing to brokerage customers. The company was formerly known as BofI Holding, Inc. and changed its name to Axos Financial, Inc. in September 2018. Axos Financial, Inc. was incorporated in 1999 and is based in Las Vegas, Nevada.

About Sparta Commercial Services

Sparta Commercial Services, Inc. develops, markets, and manages business websites and mobile applications for smartphones and tablets under the iMobileApp name. It offers mobile applications for vehicle dealerships, racetracks, private clubs, country clubs, schools and entertainment venues, restaurants, grocery stores, and various other merchant types. The company also owns and manages websites, which sell motorcycle, recreational vehicle, and truck title history reports for consumers, retailers, municipals, nonprofits, auction houses, banks, and insurance companies; and designs, launches, maintains, and hosts websites for businesses, as well as provides text messaging services. In addition, it offers eCommerce, customer relationship management development and integration, search engine optimization, social media marketing, and online reviews website services to its clients. Further, the company provides an equipment-leasing product for local and state agencies that helps to finance their essential equipment needs, including police motorcycles, cruisers, buses, fire trucks, and EMS equipment; and a range of hemp-derived cannabinol products through newworldhealthcbd.com. The company was incorporated in 1980 and is headquartered in New York, New York.