Head to Head Analysis: Blackstone Mortgage Trust (NYSE:BXMT) and Ellington Financial (NYSE:EFC)

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

Analyst Ratings

This is a summary of recent ratings for Ellington Financial and Blackstone Mortgage Trust, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Ellington Financial	0	4	2	0	2.33
Blackstone Mortgage Trust	1	4	4	0	2.33

Ellington Financial presently has a consensus price target of $13.83, suggesting a potential upside of 24.37%. Blackstone Mortgage Trust has a consensus price target of $17.00, suggesting a potential upside of 58.66%. Given Blackstone Mortgage Trust’s higher possible upside, analysts plainly believe Blackstone Mortgage Trust is more favorable than Ellington Financial.

Volatility and Risk

Ellington Financial has a beta of 1.01, indicating that its stock price is 1% more volatile than the S&P 500. Comparatively, Blackstone Mortgage Trust has a beta of 0.9, indicating that its stock price is 10% less volatile than the S&P 500.

Dividends

Ellington Financial pays an annual dividend of $1.56 per share and has a dividend yield of 14.0%. Blackstone Mortgage Trust pays an annual dividend of $1.88 per share and has a dividend yield of 17.5%. Ellington Financial pays out 94.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Blackstone Mortgage Trust pays out -84.3% of its earnings in the form of a dividend. Blackstone Mortgage Trust is clearly the better dividend stock, given its higher yield and lower payout ratio.

Profitability

This table compares Ellington Financial and Blackstone Mortgage Trust’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Ellington Financial	41.95%	15.83%	1.32%
Blackstone Mortgage Trust	-48.18%	9.17%	1.56%

Institutional & Insider Ownership

55.6% of Ellington Financial shares are owned by institutional investors. Comparatively, 64.2% of Blackstone Mortgage Trust shares are owned by institutional investors. 3.2% of Ellington Financial shares are owned by insiders. Comparatively, 1.2% of Blackstone Mortgage Trust shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Earnings & Valuation

This table compares Ellington Financial and Blackstone Mortgage Trust”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Ellington Financial	$189.96 million	7.60	$146.87 million	$1.66	6.70
Blackstone Mortgage Trust	$1.36 billion	1.31	$109.57 million	($2.23)	-4.80

Ellington Financial has higher earnings, but lower revenue than Blackstone Mortgage Trust. Blackstone Mortgage Trust 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 Blackstone Mortgage Trust on 8 of the 15 factors compared between the two stocks.

About Ellington Financial

Ellington Financial Inc. is a real estate investment trust that invests in a diversified portfolio of financial assets, with a focus on mortgage-related investments. Its holdings include residential and commercial mortgage loans and securities, as well as other asset-backed and consumer-related investments. The company seeks to generate income and returns through investing in, financing and managing these assets. Its portfolio may include mortgage servicing rights and other investments related to residential and commercial real estate.

About Blackstone Mortgage Trust

Blackstone Mortgage Trust, Inc. is a real estate investment trust focused on commercial real estate finance. The company originates and acquires commercial mortgage loans, primarily senior loans secured by income-producing properties. Its investments span major commercial real estate markets in North America, Europe and Australia. Blackstone Mortgage Trust is externally managed by an affiliate of Blackstone and draws on the firm’s real estate investment platform. The company was formerly known as Capital Trust, Inc. and adopted the Blackstone Mortgage Trust name in 2013.