Ellington Credit (NYSE:EARN – Get Free Report) and DigitalBridge Group (NYSE:DBRG – Get Free Report) are both finance companies, but which is the better investment? We will contrast the two companies based on the strength of their profitability, institutional ownership, analyst recommendations, risk, valuation, earnings and dividends.
Profitability
This table compares Ellington Credit and DigitalBridge Group’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Ellington Credit | -75.00% | 16.47% | 3.87% |
| DigitalBridge Group | N/A | 3.89% | 1.86% |
Valuation & Earnings
This table compares Ellington Credit and DigitalBridge Group”s gross revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Ellington Credit | $51.80 million | 3.38 | -$38.85 million | ($1.04) | -4.48 |
| DigitalBridge Group | $374.45 million | 7.63 | $141.87 million | $0.49 | 31.99 |
DigitalBridge Group has higher revenue and earnings than Ellington Credit. Ellington Credit is trading at a lower price-to-earnings ratio than DigitalBridge Group, 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. Comparatively, 92.7% of DigitalBridge Group shares are held by institutional investors. 1.4% of Ellington Credit shares are held by company insiders. Comparatively, 3.4% of DigitalBridge Group shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.
Analyst Ratings
This is a breakdown of current ratings and recommmendations for Ellington Credit and DigitalBridge Group, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Ellington Credit | 0 | 1 | 1 | 0 | 2.50 |
| DigitalBridge Group | 1 | 7 | 1 | 0 | 2.00 |
Ellington Credit presently has a consensus target price of $5.75, indicating a potential upside of 23.52%. DigitalBridge Group has a consensus target price of $16.00, indicating a potential upside of 2.07%. Given Ellington Credit’s stronger consensus rating and higher probable upside, analysts clearly believe Ellington Credit is more favorable than DigitalBridge Group.
Risk and Volatility
Ellington Credit has a beta of 1.26, suggesting that its stock price is 26% more volatile than the S&P 500. Comparatively, DigitalBridge Group has a beta of 1.48, suggesting that its stock price is 48% more volatile than the S&P 500.
Dividends
Ellington Credit pays an annual dividend of $0.96 per share and has a dividend yield of 20.6%. DigitalBridge Group pays an annual dividend of $0.04 per share and has a dividend yield of 0.3%. Ellington Credit pays out -92.3% of its earnings in the form of a dividend. DigitalBridge Group pays out 8.2% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Ellington Credit is clearly the better dividend stock, given its higher yield and lower payout ratio.
Summary
DigitalBridge Group beats Ellington Credit on 9 of the 15 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 DigitalBridge Group
DigitalBridge is an infrastructure investment firm specializing in digital infrastructure assets. They provide services to institutional investors. They primarily invest in data centers, cell towers, fiber networks, small cells, and edge infrastructure. DigitalBridge Group, Inc. was founded in 1991 and is headquartered in Boca Raton, Florida with additional offices in Los Angles, California, and New York New York.
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