Reviewing Ellington Credit (EARN) and The Competition

Ellington Credit (NYSE:EARN) is one of 1,743 publicly-traded companies in the “Capital Markets” industry, but how does it compare to its peers? We will compare Ellington Credit to related companies based on the strength of its dividends, institutional ownership, analyst recommendations, earnings, profitability, valuation and risk.

Profitability

This table compares Ellington Credit and its peers’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Ellington Credit	-70.52%	N/A	N/A
Ellington Credit Competitors	317.76%	10.36%	3.68%

Volatility & Risk

Ellington Credit has a beta of 1.32, indicating that its share price is 32% more volatile than the S&P 500. Comparatively, Ellington Credit’s peers have a beta of 0.79, indicating that their average share price is 21% less volatile than the S&P 500.

Insider and Institutional Ownership

20.4% of Ellington Credit shares are owned by institutional investors. Comparatively, 30.6% of shares of all “Capital Markets” companies are owned by institutional investors. 1.4% of Ellington Credit shares are owned by company insiders. Comparatively, 12.9% of shares of all “Capital Markets” companies are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Dividends

Ellington Credit pays an annual dividend of $0.96 per share and has a dividend yield of 28.8%. Ellington Credit pays out -98.0% of its earnings in the form of a dividend. As a group, “Capital Markets” companies pay a dividend yield of 3.2% and pay out 29.2% of their earnings in the form of a dividend. Ellington Credit is clearly a better dividend stock than its peers, given its higher yield and lower payout ratio.

Analyst Ratings

This is a summary of current recommendations for Ellington Credit and its peers, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Ellington Credit	0	0	1	0	3.00
Ellington Credit Competitors	5574	20169	22516	647	2.37

Ellington Credit presently has a consensus target price of $5.25, suggesting a potential upside of 57.42%. As a group, “Capital Markets” companies have a potential upside of 24.09%. Given Ellington Credit’s stronger consensus rating and higher probable upside, research analysts clearly believe Ellington Credit is more favorable than its peers.

Valuation & Earnings

This table compares Ellington Credit and its peers top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
Ellington Credit	$51.80 million	-$38.85 million	-3.40
Ellington Credit Competitors	$5.22 billion	$399.89 million	17.37

Ellington Credit’s peers have higher revenue and earnings than Ellington Credit. Ellington Credit is trading at a lower price-to-earnings ratio than its peers, indicating that it is currently more affordable than other companies in its industry.

Summary

Ellington Credit peers beat Ellington Credit on 9 of the 15 factors compared.

About Ellington Credit

Ellington Credit Corporation (NYSE:EARN) is a real estate investment trust focused primarily on residential mortgage credit. The company invests in residential mortgage-backed securities, residential mortgage loans and other residential real estate-related assets, with an emphasis on credit-sensitive investments that may offer exposure to different segments of the housing finance market. Ellington Credit is externally managed by Ellington Residential Mortgage LP, an affiliate of Ellington Management Group.