Contrasting ACRES Commercial Realty (NYSE:ACR) and Ellington Credit (NYSE:EARN)

ACRES Commercial Realty (NYSE:ACR) and Ellington Credit (NYSE:EARN) are both small-cap finance companies, but which is the better stock? We will contrast the two companies based on the strength of their dividends, analyst recommendations, institutional ownership, risk, profitability, earnings and valuation.

Risk and Volatility

ACRES Commercial Realty has a beta of 1.8, indicating that its stock price is 80% more volatile than the S&P 500. Comparatively, Ellington Credit has a beta of 1.33, indicating that its stock price is 33% more volatile than the S&P 500.

Valuation and Earnings

This table compares ACRES Commercial Realty and Ellington Credit”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
ACRES Commercial Realty	$92.97 million	1.54	$29.27 million	($0.02)	-961.00
Ellington Credit	$15.07 million	13.32	$6.59 million	$0.18	29.69

ACRES Commercial Realty has higher revenue and earnings than Ellington Credit. ACRES Commercial Realty is trading at a lower price-to-earnings ratio than Ellington Credit, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares ACRES Commercial Realty and Ellington Credit’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
ACRES Commercial Realty	26.22%	3.37%	0.80%
Ellington Credit	19.24%	15.90%	3.89%

Analyst Ratings

This is a breakdown of recent recommendations for ACRES Commercial Realty and Ellington Credit, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
ACRES Commercial Realty	0	2	1	0	2.33
Ellington Credit	0	1	1	0	2.50

ACRES Commercial Realty currently has a consensus price target of $23.50, suggesting a potential upside of 22.27%. Ellington Credit has a consensus price target of $5.88, suggesting a potential upside of 9.92%. Given ACRES Commercial Realty’s higher possible upside, equities research analysts plainly believe ACRES Commercial Realty is more favorable than Ellington Credit.

Institutional and Insider Ownership

40.0% of ACRES Commercial Realty shares are held by institutional investors. Comparatively, 20.4% of Ellington Credit shares are held by institutional investors. 3.9% of ACRES Commercial Realty shares are held by company insiders. Comparatively, 1.4% of Ellington Credit shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Summary

ACRES Commercial Realty beats Ellington Credit on 7 of the 13 factors compared between the two stocks.

About ACRES Commercial Realty

ACRES Commercial Realty Corp., a real estate investment trust (REIT), focuses on the origination, holding, and management of commercial real estate mortgage loans and equity investments in commercial real estate property in the United States. It invests in commercial real estate-related assets, including floating-rate first mortgage loans, first priority interests in first mortgage loans, subordinated interests in first mortgage loans, mezzanine financing, preferred equity investments, and commercial mortgage-backed securities. The company qualifies as a real estate investment trust for federal income tax purposes. It generally would not be subject to federal corporate income taxes if it distributes at least 90% of its taxable income to its stockholders. The company was formerly known as Exantas Capital Corp. and changed its name to ACRES Commercial Realty Corp. in February 2021. ACRES Commercial Realty Corp. was incorporated in 2005 and is based in Uniondale, New York.

About Ellington Credit

Ellington Credit Company, a real estate investment trust, acquires, invests in, and manages residential mortgage-and real estate-related assets. It acquires and manages residential mortgage-backed securities (RMBS), including agency pools and agency collateralized mortgage obligations (CMOs); and non-agency RMBS, such as non-agency CMOs, such as investment grade and non-investment grade. The company has elected to be taxed as a real estate investment trust. As a result, it would not be subject to corporate income tax on that portion of its net income that is distributed to shareholders. The company was formerly known as Ellington Residential Mortgage REIT and changed its name to Ellington Credit Company in April 2024. Ellington Credit Company was incorporated in 2012 and is based in Old Greenwich, Connecticut.