EFC vs EARN

For growth investors, Ellington Financial Inc.

(EFC) is the stronger pick with 139. 0% revenue growth year-over-year, versus -8. 4% for Ellington Credit Company (EARN). Ellington Financial Inc. (EFC) offers the better valuation at 11. 4x trailing P/E (7. 5x forward), making it the more compelling value choice. Analysts rate Ellington Financial Inc. (EFC) a "Buy" — based on 13 analyst ratings — the highest consensus in this comparison. The "better buy" depends entirely on your goals: growth investors should weight revenue trajectory, value investors should weight P/E and PEG, and income investors should weight dividend yield and streak.

On trailing P/E, Ellington Financial Inc.

(EFC) is the cheapest at 11. 4x versus Ellington Credit Company at 20. 2x. On forward P/E, Ellington Credit Company is actually cheaper at 4. 6x — notably different from the trailing picture, reflecting expected earnings growth.

Over the past 5 years, Ellington Financial Inc.

(EFC) delivered a total return of +23. 4%, compared to -17. 6% for Ellington Credit Company (EARN). Over 10 years, the gap is even starker: EFC returned +77. 0% versus EARN's +33. 4%. Past returns do not guarantee future results, and the stock with the higher historical return may already have its best growth priced in.

By beta (market sensitivity over 5 years), Ellington Financial Inc.

(EFC) is the lower-risk stock at 0. 47β versus Ellington Credit Company's 0. 63β — meaning EARN is approximately 35% more volatile than EFC relative to the S&P 500. On balance sheet safety, Ellington Credit Company (EARN) carries a lower debt/equity ratio of 3% versus 9% for Ellington Financial Inc. — giving it more financial flexibility in a downturn.

By revenue growth (latest reported year), Ellington Financial Inc.

(EFC) is pulling ahead at 139. 0% versus -8. 4% for Ellington Credit Company (EARN). On earnings-per-share growth, the picture is similar: Ellington Financial Inc. grew EPS -12. 5% year-over-year, compared to -22. 6% for Ellington Credit Company. Higher growth typically commands a higher valuation multiple — check whether the premium P/E or P/S is justified by the growth rate using the PEG ratio.

Ellington Financial Inc.

(EFC) is the more profitable company, earning 21. 8% net margin versus 13. 0% for Ellington Credit Company — meaning it keeps 21. 8% of every revenue dollar as bottom-line profit. Operating margin tells a similar story: EFC leads at 61. 6% versus 14. 0% for EARN. At the gross margin level — before operating expenses — EFC leads at 84. 3%, reflecting greater pricing power or product mix advantage. Stronger margins indicate durable pricing power, lower cost of revenue, or higher mix of software/services. They are one of the clearest signs of business quality.

On forward earnings alone, Ellington Credit Company (EARN) trades at 4.

6x forward P/E versus 7. 5x for Ellington Financial Inc. — 2. 9x cheaper on a one-year earnings basis. Analyst consensus price targets imply the most upside for EARN: 23. 7% to $6. 00.

All stocks in this comparison pay dividends.

Ellington Credit Company (EARN) offers the highest yield at 16. 9%, versus 13. 6% for Ellington Financial Inc. (EFC).

For long-horizon retirement investors, Ellington Financial Inc.

(EFC) is the stronger choice — it scores higher on the combination of lower volatility, dividend reliability, and long-term compounding (low volatility (β 0. 47), 13. 6% yield). Both have compounded well over 10 years (EFC: +77. 0%, EARN: +33. 4%), confirming both are viable long-term holds — but the lower-volatility option typically results in less emotional selling during corrections. Retirement portfolios generally favour predictability over maximum returns. Consult a financial advisor before making allocation decisions.

These companies operate in different sectors (EFC (Real Estate) and EARN (Financial Services)), which means they face different economic cycles, regulatory environments, and macro sensitivities — making direct comparison nuanced.

In terms of investment character: EFC is a small-cap high-growth stock; EARN is a small-cap income-oriented stock. These fundamental differences mean investors should not choose between them on a single metric — the "better stock" depends entirely on which of these characteristics aligns with your investment strategy.