Reviewing Ellington Financial (NYSE:EFC) & Bimini Capital Management (OTCMKTS:BMNM)

Ellington Financial (NYSE:EFC) and Bimini Capital Management (OTCMKTS:BMNM) are both small-cap finance companies, but which is the superior business? We will compare the two companies based on the strength of their earnings, institutional ownership, profitability, valuation, analyst recommendations, risk and dividends.

Analyst Recommendations

This is a breakdown of recent ratings for Ellington Financial and Bimini Capital Management, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Ellington Financial	0	3	5	0	2.63
Bimini Capital Management	0	0	0	0	0.00

Ellington Financial currently has a consensus target price of $14.46, suggesting a potential upside of 4.88%. Given Ellington Financial’s stronger consensus rating and higher probable upside, equities analysts clearly believe Ellington Financial is more favorable than Bimini Capital Management.

Earnings & Valuation

This table compares Ellington Financial and Bimini Capital Management”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Ellington Financial	$301.22 million	4.57	$145.86 million	$1.34	10.29
Bimini Capital Management	$11.90 million	1.44	-$1.31 million	$0.09	18.89

Ellington Financial has higher revenue and earnings than Bimini Capital Management. Ellington Financial is trading at a lower price-to-earnings ratio than Bimini Capital Management, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Ellington Financial and Bimini Capital Management’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Ellington Financial	89.52%	13.56%	1.07%
Bimini Capital Management	-4.70%	-8.69%	-0.44%

Insider & Institutional Ownership

55.6% of Ellington Financial shares are held by institutional investors. 4.1% of Ellington Financial shares are held by insiders. Comparatively, 45.4% of Bimini Capital Management shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Volatility and Risk

Ellington Financial has a beta of 1.01, indicating that its share price is 1% more volatile than the S&P 500. Comparatively, Bimini Capital Management has a beta of 0.19, indicating that its share price is 81% less volatile than the S&P 500.

Dividends

Ellington Financial pays an annual dividend of $1.56 per share and has a dividend yield of 11.3%. Bimini Capital Management pays an annual dividend of $0.13 per share and has a dividend yield of 7.6%. Ellington Financial pays out 116.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Bimini Capital Management pays out 144.4% 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 is clearly the better dividend stock, given its higher yield and lower payout ratio.

Summary

Ellington Financial beats Bimini Capital Management on 15 of the 16 factors compared between the two stocks.

About Ellington Financial

Ellington Financial Inc., through its subsidiary, Ellington Financial Operating Partnership LLC, acquires and manages mortgage-related, consumer-related, corporate-related, and other financial assets in the United States. The company acquires and manages residential mortgage-backed securities (RMBS) backed by prime jumbo, Alt-A, manufactured housing, and subprime mortgage; RMBS for which the principal and interest payments are guaranteed by the U.S. government agency or the U.S. government-sponsored entity; residential mortgage loans; commercial mortgage-backed securities; and commercial mortgage loans and other commercial real estate debt. It also provides collateralized loan obligations; mortgage-related and non-mortgage-related derivatives; corporate debt and equity securities; corporate loans; and other strategic investments; and consumer loans and asset-backed securities backed by consumer and commercial assets. The company qualifies as a real estate investment trust (REIT) for federal income tax purposes. As a REIT, it intends to distribute at least 90% of its taxable income as dividends to shareholders. Ellington Financial LLC was incorporated in 2007 and is headquartered in Old Greenwich, Connecticut.

About Bimini Capital Management

Bimini Capital Management, Inc., through its subsidiaries, operates as a specialty finance company in the United States. The company operates in two segments, Asset Management and Investment Portfolio. The Asset Management segment includes investment advisory services by Bimini Advisors to Orchid Island Capital, Inc. and Royal Palm Capital, LLC. The Investment Portfolio segment engages in investment activities conducted by Royal Palm Capital, LLC. It invests in residential mortgage-backed securities. The company was formerly known as Opteum Inc. and changed its name to Bimini Capital Management, Inc. in September 2007. Bimini Capital Management, Inc. was founded in 2003 and is based in Vero Beach, Florida.