Critical Review: Ellington Financial (EFC) and Its Peers
Ellington Financial (NYSE: EFC) is one of 26 public companies in the “Retail & Mortgage Banks” industry, but how does it contrast to its peers? We will compare Ellington Financial to related companies based on the strength of its risk, earnings, institutional ownership, dividends, valuation, analyst recommendations and profitability.
This table compares Ellington Financial and its peers’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Ellington Financial Competitors||14.79%||-27.48%||0.87%|
This is a breakdown of recent ratings and recommmendations for Ellington Financial and its peers, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Ellington Financial Competitors||160||565||523||23||2.32|
Ellington Financial currently has a consensus target price of $18.75, suggesting a potential upside of 19.12%. As a group, “Retail & Mortgage Banks” companies have a potential upside of 26.40%. Given Ellington Financial’s peers higher possible upside, analysts clearly believe Ellington Financial has less favorable growth aspects than its peers.
Ellington Financial pays an annual dividend of $1.80 per share and has a dividend yield of 11.4%. 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. As a group, “Retail & Mortgage Banks” companies pay a dividend yield of 1.6% and pay out 28.4% of their earnings in the form of a dividend.
Institutional & Insider Ownership
50.5% of Ellington Financial shares are held by institutional investors. Comparatively, 54.7% of shares of all “Retail & Mortgage Banks” companies are held by institutional investors. 10.6% of Ellington Financial shares are held by insiders. Comparatively, 12.8% of shares of all “Retail & Mortgage Banks” companies are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.
Earnings and Valuation
This table compares Ellington Financial and its peers top-line revenue, earnings per share and valuation.
|Gross Revenue||EBITDA||Price/Earnings Ratio|
|Ellington Financial||$69.62 million||N/A||22.49|
|Ellington Financial Competitors||$678.45 million||$169.32 million||12.39|
Ellington Financial’s peers have higher revenue and earnings than Ellington Financial. Ellington Financial is trading at a higher price-to-earnings ratio than its peers, indicating that it is currently more expensive than other companies in its industry.
Volatility and Risk
Ellington Financial has a beta of 0.43, meaning that its share price is 57% less volatile than the S&P 500. Comparatively, Ellington Financial’s peers have a beta of 0.83, meaning that their average share price is 17% less volatile than the S&P 500.
About Ellington Financial
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.
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