Critical Contrast: Ellington Financial (NYSE:EFC) versus Generation Income Properties (NASDAQ:GIPR)

Ellington Financial (NYSE:EFC) and Generation Income Properties (NASDAQ:GIPR) are both small-cap finance companies, but which is the better investment? We will contrast the two businesses based on the strength of their profitability, valuation, dividends, institutional ownership, risk, earnings and analyst recommendations.

Insider and Institutional Ownership

55.6% of Ellington Financial shares are owned by institutional investors. Comparatively, 20.7% of Generation Income Properties shares are owned by institutional investors. 4.1% of Ellington Financial shares are owned by insiders. Comparatively, 5.6% of Generation Income Properties shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Valuation & Earnings

This table compares Ellington Financial and Generation Income Properties”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Ellington Financial	$136.41 million	9.96	$145.86 million	$1.24	10.97
Generation Income Properties	$9.76 million	0.71	-$8.35 million	($1.90)	-0.67

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

Risk & Volatility

Ellington Financial has a beta of 1, meaning that its stock price has a similar volatility profile to the S&P 500.Comparatively, Generation Income Properties has a beta of -0.1, meaning that its stock price is 110% less volatile than the S&P 500.

Analyst Recommendations

This is a summary of current ratings for Ellington Financial and Generation Income Properties, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Ellington Financial	0	3	5	0	2.63
Generation Income Properties	1	0	0	0	1.00

Ellington Financial presently has a consensus target price of $14.46, indicating a potential upside of 6.26%. Given Ellington Financial’s stronger consensus rating and higher possible upside, equities analysts plainly believe Ellington Financial is more favorable than Generation Income Properties.

Profitability

This table compares Ellington Financial and Generation Income Properties’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Ellington Financial	89.52%	13.56%	1.07%
Generation Income Properties	-105.40%	-247.43%	-8.66%

Summary

Ellington Financial beats Generation Income Properties on 13 of the 14 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 Generation Income Properties

Generation Income Properties, Inc., located in Tampa, Florida, is an internally managed real estate investment trust formed to acquire and own, directly and jointly, real estate investments focused on retail, office, and industrial net lease properties in densely populated submarkets.