Ellington Financial (NYSE: EFC) and People’s United Financial (NASDAQ:PBCT) are both finance companies, but which is the better investment? We will contrast the two companies based on the strength of their earnings, dividends, risk, valuation, profitabiliy, analyst recommendations and institutional ownership.
Ellington Financial pays an annual dividend of $1.80 per share and has a dividend yield of 11.2%. People’s United Financial pays an annual dividend of $0.69 per share and has a dividend yield of 4.0%. Ellington Financial pays out 257.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. People’s United Financial pays out 77.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Ellington Financial has raised its dividend for 10 consecutive years. Ellington Financial is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Valuation and Earnings
This table compares Ellington Financial and People’s United Financial’s revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Ellington Financial||$68.32 million||7.53||$22.48 million||$0.70||22.89|
|People’s United Financial||$1.34 billion||4.38||$300.38 million||$0.89||19.55|
People’s United Financial has higher revenue and earnings than Ellington Financial. People’s United Financial is trading at a lower price-to-earnings ratio than Ellington Financial, indicating that it is currently the more affordable of the two stocks.
This is a summary of current ratings and target prices for Ellington Financial and People’s United Financial, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|People’s United Financial||2||8||0||0||1.80|
Ellington Financial presently has a consensus target price of $19.17, indicating a potential upside of 19.64%. People’s United Financial has a consensus target price of $18.03, indicating a potential upside of 3.63%. Given Ellington Financial’s stronger consensus rating and higher probable upside, research analysts clearly believe Ellington Financial is more favorable than People’s United Financial.
Insider & Institutional Ownership
51.1% of Ellington Financial shares are held by institutional investors. Comparatively, 75.9% of People’s United Financial shares are held by institutional investors. 10.6% of Ellington Financial shares are held by insiders. Comparatively, 2.7% of People’s United Financial shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.
This table compares Ellington Financial and People’s United Financial’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|People’s United Financial||18.88%||6.14%||0.75%|
Risk and Volatility
Ellington Financial has a beta of 0.44, meaning that its stock price is 56% less volatile than the S&P 500. Comparatively, People’s United Financial has a beta of 0.82, meaning that its stock price is 18% less volatile than the S&P 500.
Ellington Financial beats People’s United Financial on 9 of the 17 factors compared between the two stocks.
Ellington Financial Company Profile
Ellington Financial LLC is a specialty finance company that acquires and manages mortgage-related and other financial assets. The Company’s targeted assets include residential mortgage-backed securities (RMBS), backed by loans for which the principal and interest payments are not guaranteed by a United States Government agency or a United States Government-sponsored entity, collectively referred to as non-Agency RMBS; RMBS for which the principal and interest payments are guaranteed by the United States government agency or the United States government-sponsored entity (Agency RMBS); consumer loans and asset-backed securities (ABS) backed by consumer loans; commercial mortgage-backed securities (CMBS) commercial mortgage loans and other commercial real estate debt; residential mortgage loans; collateralized loan obligations (CLOs); corporate debt and equity, including distressed debt and equity, and mortgage-related derivatives.
People’s United Financial Company Profile
People’s United Financial, Inc. is a bank holding company and a financial holding company of People’s United Bank (the Bank). The Bank is engaged in providing commercial banking, retail banking and wealth management services to individual, corporate and municipal customers. The Company operates through two segments: Commercial Banking and Retail Banking. Commercial Banking segment is engaged in commercial real estate lending, commercial and industrial lending, and commercial deposit gathering activities. It offers cash management, correspondent banking, municipal banking, institutional trust services, corporate trust, insurance services and private banking, among others. Retail Banking segment provides consumer lending (including residential mortgage and home equity lending) and consumer deposit gathering activities. The Retail Banking segment also includes brokerage, financial advisory services, investment management services, and life insurance and non-institutional trust services.
Receive News & Ratings for Ellington Financial LLC Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for Ellington Financial LLC and related companies with MarketBeat.com's FREE daily email newsletter.