Ellington Credit (NYSE:EARN) versus Bimini Capital Management (OTCMKTS:BMNM) Critical Analysis

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

Earnings & Valuation

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Bimini Capital Management	$11.90 million	2.60	-$1.31 million	$0.09	34.11
Ellington Credit	$15.07 million	14.02	$6.59 million	$0.08	70.31

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

Institutional & Insider Ownership

20.4% of Ellington Credit shares are held by institutional investors. 45.4% of Bimini Capital Management shares are held by insiders. Comparatively, 1.4% of Ellington Credit shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Analyst Ratings

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

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Bimini Capital Management	0	0	0	0	0.00
Ellington Credit	0	1	1	0	2.50

Ellington Credit has a consensus target price of $6.25, indicating a potential upside of 11.11%. Given Ellington Credit’s stronger consensus rating and higher probable upside, analysts clearly believe Ellington Credit is more favorable than Bimini Capital Management.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Bimini Capital Management	5.98%	11.89%	0.63%
Ellington Credit	12.41%	16.47%	3.87%

Volatility and Risk

Bimini Capital Management has a beta of 0.04, meaning that its stock price is 96% less volatile than the S&P 500. Comparatively, Ellington Credit has a beta of 1.28, meaning that its stock price is 28% more volatile than the S&P 500.

Summary

Ellington Credit beats Bimini Capital Management on 12 of the 14 factors compared between the two stocks.

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.

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.