Head to Head Analysis: Rithm Property Trust (NYSE:RPT) & Ellington Financial (NYSE:EFC)

Ellington Financial (NYSE:EFC) and Rithm Property Trust (NYSE:RPT) are both small-cap finance companies, but which is the better business? We will compare the two businesses based on the strength of their risk, analyst recommendations, dividends, institutional ownership, profitability, valuation and earnings.

Insider and Institutional Ownership

55.6% of Ellington Financial shares are owned by institutional investors. Comparatively, 58.6% of Rithm Property Trust shares are owned by institutional investors. 3.2% of Ellington Financial shares are owned by insiders. Comparatively, 0.4% of Rithm Property Trust shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for Ellington Financial and Rithm Property Trust, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Ellington Financial	0	4	0	0	2.00
Rithm Property Trust	1	0	0	1	2.50

Ellington Financial presently has a consensus price target of $14.50, suggesting a potential upside of 10.90%. Given Ellington Financial’s higher probable upside, analysts clearly believe Ellington Financial is more favorable than Rithm Property Trust.

Profitability

This table compares Ellington Financial and Rithm Property Trust’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 Property Trust	5.87%	1.20%	0.29%

Volatility & Risk

Ellington Financial has a beta of 0.94, indicating that its share price is 6% less volatile than the S&P 500. Comparatively, Rithm Property Trust has a beta of 1.23, indicating that its share price is 23% more volatile than the S&P 500.

Earnings & Valuation

This table compares Ellington Financial and Rithm Property Trust”s 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	8.87	$146.87 million	$1.64	7.97
Rithm Property Trust	$52.80 million	1.86	$1.47 million	($0.26)	-48.73

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

Dividends

Ellington Financial pays an annual dividend of $1.56 per share and has a dividend yield of 11.9%. Rithm Property Trust pays an annual dividend of $1.44 per share and has a dividend yield of 11.4%. 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 Property Trust pays out -553.8% of its earnings in the form of a dividend.

Summary

Ellington Financial beats Rithm Property Trust on 11 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 Property Trust

Rithm Property Trust Inc is a real estate investment trust (REIT) externally managed by an affiliate of Rithm Capital Corp. (Rithm). The company focuses on commercial real estate-focused investment, including originating, acquiring and managing portfolios of CMBS, commercial real property, commercial mortgage loans and other CRE investments. It has two reportable operating segments: Residential and Commercial. The majority of the company’s revenue is derived from the Residential segment, which is focused on managing a portfolio that includes residential mortgage assets, including whole mortgage loans, RMBS and beneficial interests.