Ellington Financial (NYSE:EFC – Get Free Report) and Rithm Capital (NYSE:RITM – Get Free Report) are both finance companies, but which is the better business? We will compare the two businesses based on the strength of their institutional ownership, analyst recommendations, valuation, profitability, risk, dividends and earnings.
Profitability
This table compares Ellington Financial and Rithm Capital’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Ellington Financial | 52.43% | 16.61% | 1.38% |
| Rithm Capital | 9.20% | 19.86% | 2.84% |
Analyst Ratings
This is a breakdown of current ratings for Ellington Financial and Rithm Capital, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Ellington Financial | 0 | 4 | 1 | 0 | 2.20 |
| Rithm Capital | 1 | 0 | 10 | 0 | 2.82 |
Dividends
Ellington Financial pays an annual dividend of $1.56 per share and has a dividend yield of 13.4%. Rithm Capital pays an annual dividend of $1.00 per share and has a dividend yield of 11.6%. Ellington Financial pays out 95.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Rithm Capital pays out 166.7% 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.
Volatility & Risk
Ellington Financial has a beta of 0.97, suggesting that its stock price is 3% less volatile than the S&P 500. Comparatively, Rithm Capital has a beta of 1.16, suggesting that its stock price is 16% more volatile than the S&P 500.
Insider and Institutional Ownership
55.6% of Ellington Financial shares are held by institutional investors. Comparatively, 44.9% of Rithm Capital shares are held by institutional investors. 3.2% of Ellington Financial shares are held by insiders. Comparatively, 0.6% of Rithm Capital shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.
Valuation and Earnings
This table compares Ellington Financial and Rithm Capital”s gross revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Ellington Financial | $189.96 million | 7.91 | $146.87 million | $1.64 | 7.11 |
| Rithm Capital | $4.59 billion | 1.05 | $681.45 million | $0.60 | 14.39 |
Rithm Capital has higher revenue and earnings than Ellington Financial. Ellington Financial is trading at a lower price-to-earnings ratio than Rithm Capital, indicating that it is currently the more affordable of the two stocks.
Summary
Rithm Capital beats Ellington Financial on 9 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 Rithm Capital
Rithm Capital Corp. operates as an asset manager focused on real estate, credit, and financial services. It operates through Origination and Servicing, Investment Portfolio, Mortgage Loans Receivable, and Asset Management segments. Its investment portfolio primarily comprises of mortgage servicing rights (MSR), and MSR financing receivables, title, appraisal and property preservation, excess MSRs, and services advance investments; real estate securities, call rights, SFR properties, and residential mortgage loans; consumer and business purpose loans; and asset management related investments. 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 New Residential Investment Corp. and changed its name to Rithm Capital Corp. in August 2022. Rithm Capital Corp. was incorporated in 2011 and is based in New York, New York.
Receive News & Ratings for Ellington Financial Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for Ellington Financial and related companies with MarketBeat.com's FREE daily email newsletter.
