Ellington Credit (NYSE:EARN) Announces Earnings Results, Misses Expectations By $0.03 EPS

Key Points

• Q4 results missed estimates: Ellington Credit reported EPS of $0.21 (vs. $0.24 expected), missing by $0.03, and revenue of $11.12M versus $12.71M expected; the fund posted a net margin of 12.41% and ROE of 16.47%.
• Generous but risky dividend: The firm declared a monthly $0.08 dividend (ex-dividend Feb 27, payable Mar 31) implying a 19.3% yield and a very high dividend payout ratio of 1,200%, which may signal sustainability concerns.
• Market/analyst snapshot: shares trade near $4.98 with a market cap of $187M and a P/E of 62.26; analysts have a consensus rating of Moderate Buy and an average price target of $6.25.

Ellington Credit (NYSE:EARN - Get Free Report) announced its quarterly earnings results on Wednesday. The real estate investment trust reported $0.21 earnings per share for the quarter, missing analysts' consensus estimates of $0.24 by ($0.03), Zacks reports. The company had revenue of $11.12 million during the quarter, compared to analysts' expectations of $12.71 million. Ellington Credit had a net margin of 12.41% and a return on equity of 16.47%.

Ellington Credit Price Performance

Shares of NYSE EARN opened at $4.98 on Thursday. The company has a market cap of $187.05 million, a PE ratio of 62.26 and a beta of 1.29. The stock has a fifty day moving average price of $5.31 and a 200 day moving average price of $5.37. Ellington Credit has a 1-year low of $4.32 and a 1-year high of $6.46.

Ellington Credit Announces Dividend

The business also recently declared a monthly dividend, which will be paid on Tuesday, March 31st. Investors of record on Friday, February 27th will be issued a dividend of $0.08 per share. The ex-dividend date of this dividend is Friday, February 27th. This represents a c) annualized dividend and a dividend yield of 19.3%. Ellington Credit's dividend payout ratio (DPR) is currently 1,200.00%.

Analyst Upgrades and Downgrades

Several analysts have recently weighed in on EARN shares. UBS Group set a $6.00 target price on Ellington Credit in a report on Tuesday, December 23rd. Wall Street Zen raised Ellington Credit from a "sell" rating to a "hold" rating in a research report on Tuesday, November 11th. One analyst has rated the stock with a Buy rating and one has issued a Hold rating to the company. According to MarketBeat, Ellington Credit currently has a consensus rating of "Moderate Buy" and an average price target of $6.25.

Institutional Trading of Ellington Credit

Hedge funds and other institutional investors have recently made changes to their positions in the company. Virtu Financial LLC purchased a new position in Ellington Credit during the fourth quarter worth about $57,000. Quadrature Capital Ltd purchased a new position in shares of Ellington Credit during the 4th quarter worth approximately $75,000. Engineers Gate Manager LP acquired a new stake in shares of Ellington Credit in the 2nd quarter valued at approximately $83,000. Vident Advisory LLC lifted its holdings in shares of Ellington Credit by 109.1% in the 2nd quarter. Vident Advisory LLC now owns 36,350 shares of the real estate investment trust's stock valued at $209,000 after buying an additional 18,967 shares during the period. Finally, HighTower Advisors LLC purchased a new stake in shares of Ellington Credit in the fourth quarter valued at approximately $369,000. Hedge funds and other institutional investors own 20.40% of the company's stock.

About Ellington Credit

Ellington Credit Income Fund NYSE: EARN is a closed-end management investment company that seeks to generate current income through a diversified portfolio of mortgage- and asset-backed securities. The fund primarily invests in residential mortgage-backed securities (RMBS) and asset-backed securities (ABS), with additional exposure to commercial mortgage-backed securities (CMBS) and related structured credit instruments. To enhance income and manage risk, the fund employs leverage and derivative strategies such as interest rate swaps and credit default swaps, allowing it to adjust duration and credit exposure dynamically.

The fund is externally managed and advised by Ellington Management Group, LLC, an established investment firm specializing in mortgage credit and structured products.

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