Ellington Credit (NYSE:EARN) versus ACRES Commercial Realty (NYSE:ACR) Head-To-Head Survey

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

Risk and Volatility

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

Profitability

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

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

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Ellington Credit and ACRES Commercial Realty, as provided by MarketBeat.

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

Ellington Credit currently has a consensus price target of $5.88, indicating a potential upside of 9.51%. ACRES Commercial Realty has a consensus price target of $23.50, indicating a potential upside of 22.68%. Given ACRES Commercial Realty’s higher probable upside, analysts clearly believe ACRES Commercial Realty is more favorable than Ellington Credit.

Earnings & Valuation

This table compares Ellington Credit and ACRES Commercial Realty”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Ellington Credit	$15.07 million	13.37	$6.59 million	$0.18	29.81
ACRES Commercial Realty	$83.49 million	1.70	$29.27 million	($0.02)	-957.75

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.

Insider & Institutional Ownership

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

Summary

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

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.

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.