Reviewing Five Point (FPH) and Ellington Financial (EFC)

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Five Point (NYSE: EFC) and Ellington Financial (NYSE:EFC) are both small-cap finance companies, but which is the superior stock? We will compare the two companies based on the strength of their profitability, risk, valuation, dividends, analyst recommendations, earnings and institutional ownership.

Dividends

Ellington Financial pays an annual dividend of $1.64 per share and has a dividend yield of 10.1%. Five Point does not pay a dividend. Ellington Financial pays out 151.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Profitability

This table compares Five Point and Ellington Financial’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Five Point 129.91% -1.34% -0.88%
Ellington Financial 51.11% 5.85% 1.15%

Analyst Recommendations

This is a breakdown of current recommendations and price targets for Five Point and Ellington Financial, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Five Point 0 1 1 0 2.50
Ellington Financial 0 2 3 0 2.60

Five Point presently has a consensus price target of $13.50, suggesting a potential upside of 29.81%. Ellington Financial has a consensus price target of $17.90, suggesting a potential upside of 9.75%. Given Five Point’s higher possible upside, equities research analysts plainly believe Five Point is more favorable than Ellington Financial.

Risk & Volatility

Five Point has a beta of -0.23, meaning that its stock price is 123% less volatile than the S&P 500. Comparatively, Ellington Financial has a beta of 0.38, meaning that its stock price is 62% less volatile than the S&P 500.

Insider & Institutional Ownership

37.9% of Five Point shares are owned by institutional investors. Comparatively, 46.8% of Ellington Financial shares are owned by institutional investors. 11.1% of Ellington Financial shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Valuation & Earnings

This table compares Five Point and Ellington Financial’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Five Point $139.43 million 10.86 $73.23 million ($0.61) -17.05
Ellington Financial $93.96 million 5.23 $33.98 million $1.08 15.10

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

Summary

Ellington Financial beats Five Point on 9 of the 15 factors compared between the two stocks.

Five Point Company Profile

Five Point Holdings, LLC, through its subsidiary, Five Point Operating Company, LP, plans, develops, and owns mixed-use communities in California, the United States. It sells residential and commercial land sites to homebuilders, commercial developers, and commercial buyers. The company was formerly known as Newhall Holding Company, LLC and changed its name to Five Point Holdings, LLC in May 2016. Five Point Holdings, LLC was founded in 2009 and is based in Aliso Viejo, California.

Ellington Financial Company Profile

Ellington Financial LLC, through its subsidiary Ellington Financial Operating Partnership LLC, operates as a specialty finance company in the United States. The company acquires and manages mortgage-related assets, including residential mortgage-backed securities (RMBS) backed by prime jumbo, Alt-A, manufactured housing, and subprime residential mortgage loans; 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; commercial mortgage loans and other commercial real estate debt; and residential mortgage loans. It also provides collateralized loan obligations; mortgage-related and non-mortgage-related derivatives; equity investments in mortgage-related entities; and other strategic investments, as well as invests in corporate debt and equity securities. In addition, it offers consumer loans and asset-backed securities backed by consumer and commercial assets. Ellington Financial LLC was founded in 2007 and is based in Old Greenwich, Connecticut.

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