Ellington Residential Mortgage REIT (NYSE: EARN) and New York Mortgage Trust (NASDAQ:NYMT) 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, institutional ownership, risk, earnings, profitability, valuation and analyst recommendations.
This is a summary of recent ratings and recommmendations for Ellington Residential Mortgage REIT and New York Mortgage Trust, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Ellington Residential Mortgage REIT||0||2||0||0||2.00|
|New York Mortgage Trust||0||4||1||0||2.20|
Ellington Residential Mortgage REIT currently has a consensus price target of $14.00, indicating a potential upside of 9.63%. New York Mortgage Trust has a consensus price target of $6.19, indicating a potential downside of 3.62%. Given Ellington Residential Mortgage REIT’s higher possible upside, research analysts clearly believe Ellington Residential Mortgage REIT is more favorable than New York Mortgage Trust.
This table compares Ellington Residential Mortgage REIT and New York Mortgage Trust’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Ellington Residential Mortgage REIT||40.44%||12.02%||1.17%|
|New York Mortgage Trust||20.23%||10.78%||0.74%|
Ellington Residential Mortgage REIT pays an annual dividend of $1.60 per share and has a dividend yield of 12.5%. New York Mortgage Trust pays an annual dividend of $0.80 per share and has a dividend yield of 12.5%. Ellington Residential Mortgage REIT pays out 149.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. New York Mortgage Trust pays out 148.2% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.
Valuation and Earnings
This table compares Ellington Residential Mortgage REIT and New York Mortgage Trust’s gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Ellington Residential Mortgage REIT||$24.22 million||7.03||$11.90 million||$1.07||11.93|
|New York Mortgage Trust||$319.31 million||2.25||$67.55 million||$0.54||11.89|
New York Mortgage Trust has higher revenue and earnings than Ellington Residential Mortgage REIT. New York Mortgage Trust is trading at a lower price-to-earnings ratio than Ellington Residential Mortgage REIT, indicating that it is currently the more affordable of the two stocks.
Volatility & Risk
Ellington Residential Mortgage REIT has a beta of 0.59, suggesting that its stock price is 41% less volatile than the S&P 500. Comparatively, New York Mortgage Trust has a beta of 1.37, suggesting that its stock price is 37% more volatile than the S&P 500.
Institutional & Insider Ownership
66.7% of Ellington Residential Mortgage REIT shares are owned by institutional investors. Comparatively, 37.8% of New York Mortgage Trust shares are owned by institutional investors. 2.7% of Ellington Residential Mortgage REIT shares are owned by company insiders. Comparatively, 1.3% of New York Mortgage Trust shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.
Ellington Residential Mortgage REIT beats New York Mortgage Trust on 9 of the 16 factors compared between the two stocks.
Ellington Residential Mortgage REIT Company Profile
Ellington Residential Mortgage REIT is a real estate investment trust. The Company conducts its business through its subsidiaries, EARN OP GP LLC and Ellington Residential Mortgage LP (the Operating Partnership). It specializes in acquiring, investing in and managing residential mortgage- and real estate-related assets. It constructs and managing a portfolio consisting of residential mortgage-backed securities (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) and, to a lesser extent, RMBS backed by prime jumbo, Alternative A-paper manufactured housing, and subprime residential mortgage loans (non-Agency RMBS). Its Agency RMBS include residential mortgage pass-through certificates, collateralized mortgage obligations (CMOs) and to-be-announced mortgage pass-through certificates (TBAs). Its non-agency RMBS include investment grade and non-investment grade classes.
New York Mortgage Trust Company Profile
New York Mortgage Trust, Inc. is a real estate investment trust (REIT). The Company is engaged in the business of acquiring, investing in, financing and managing primarily mortgage-related assets and financial assets. The Company’s investment portfolio includes residential mortgage loans, including second mortgages and loans sourced from distressed markets, non-agency residential mortgage-backed securities (RMBS), multi-family commercial mortgage-backed securities, preferred equity and joint venture equity investments in, and mezzanine loans to, owners of multi-family properties, equity and debt securities issued by entities that invest in residential and commercial real estate and agency RMBS. It may acquire and manage various other types of mortgage-related and financial assets, including, without limitation, collateralized mortgage obligations and securities issued by newly originated residential securitizations, including credit sensitive securities from these securitizations.
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