AGNC Investment (NASDAQ:AGNC – Get Free Report) and Ellington Financial (NYSE:EFC – Get Free Report) are both finance companies, but which is the better stock? We will contrast the two companies based on the strength of their institutional ownership, risk, valuation, profitability, analyst recommendations, earnings and dividends.
Analyst Ratings
This is a breakdown of current ratings and recommmendations for AGNC Investment and Ellington Financial, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| AGNC Investment | 0 | 3 | 5 | 0 | 2.63 |
| Ellington Financial | 0 | 1 | 5 | 1 | 3.00 |
AGNC Investment currently has a consensus target price of $9.5833, indicating a potential downside of 3.00%. Ellington Financial has a consensus target price of $14.2917, indicating a potential upside of 1.91%. Given Ellington Financial’s stronger consensus rating and higher probable upside, analysts clearly believe Ellington Financial is more favorable than AGNC Investment.
Valuation & Earnings
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| AGNC Investment | $2.95 billion | 3.49 | $863.00 million | $0.34 | 29.06 |
| Ellington Financial | $285.59 million | 4.91 | $145.86 million | $1.24 | 11.31 |
AGNC Investment has higher revenue and earnings than Ellington Financial. Ellington Financial is trading at a lower price-to-earnings ratio than AGNC Investment, indicating that it is currently the more affordable of the two stocks.
Risk & Volatility
AGNC Investment has a beta of 1.28, indicating that its share price is 28% more volatile than the S&P 500. Comparatively, Ellington Financial has a beta of 1, indicating that its share price has a similar volatility profile to the S&P 500.
Insider & Institutional Ownership
38.3% of AGNC Investment shares are held by institutional investors. Comparatively, 55.6% of Ellington Financial shares are held by institutional investors. 0.4% of AGNC Investment shares are held by insiders. Comparatively, 4.1% of Ellington Financial shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.
Dividends
AGNC Investment pays an annual dividend of $1.44 per share and has a dividend yield of 14.6%. Ellington Financial pays an annual dividend of $1.56 per share and has a dividend yield of 11.1%. AGNC Investment pays out 423.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Ellington Financial pays out 125.8% 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 AGNC Investment and Ellington Financial’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| AGNC Investment | 11.50% | 19.32% | 1.71% |
| Ellington Financial | 89.52% | 13.56% | 1.07% |
Summary
Ellington Financial beats AGNC Investment on 9 of the 16 factors compared between the two stocks.
About AGNC Investment
AGNC Investment Corp., formerly American Capital Agency Corp., is a real estate investment trust. The Company invests in agency residential mortgage-backed securities on a leveraged basis. Its investments consist of residential mortgage pass-through securities and collateralized mortgage obligations (CMOs) for which the principal and interest payments are guaranteed by a government-sponsored enterprise, such as the Federal National Mortgage Association (Fannie Mae) and the Federal Home Loan Mortgage Corporation (Freddie Mac), or by the United States Government agency, such as the Government National Mortgage Association (Ginnie Mae) (collectively, GSEs). Its agency securities include agency residential mortgage-backed securities (Agency RMBS) and to-be-announced forward contracts (TBAs). Its Non-Agency Securities include credit risk transfer securities (CRT), non-agency residential mortgage-backed securities (Non-Agency RMBS) and commercial mortgage-backed securities (CMBS).
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.
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