Ellington Financial (NYSE: EFC) and First Bank (NASDAQ:FRBA) are both small-cap finance companies, but which is the superior business? We will compare the two companies based on the strength of their dividends, profitability, earnings, analyst recommendations, valuation, institutional ownership and risk.

Risk & Volatility

Ellington Financial has a beta of 0.43, meaning that its share price is 57% less volatile than the S&P 500. Comparatively, First Bank has a beta of 0.6, meaning that its share price is 40% less volatile than the S&P 500.

Profitability

This table compares Ellington Financial and First Bank’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Ellington Financial 26.67% 5.48% 1.32%
First Bank 17.19% N/A N/A

Analyst Recommendations

This is a breakdown of recent ratings and price targets for Ellington Financial and First Bank, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Ellington Financial 0 0 2 0 3.00
First Bank 0 0 1 0 3.00

Ellington Financial presently has a consensus price target of $18.75, suggesting a potential upside of 19.96%. First Bank has a consensus price target of $14.00, suggesting a potential upside of 10.24%. Given Ellington Financial’s higher probable upside, research analysts plainly believe Ellington Financial is more favorable than First Bank.

Earnings & Valuation

This table compares Ellington Financial and First Bank’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Ellington Financial $69.62 million 7.21 $22.48 million $0.70 22.33
First Bank $31.35 million 6.08 $9.61 million $0.64 19.84

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

Insider and Institutional Ownership

50.5% of Ellington Financial shares are held by institutional investors. Comparatively, 43.3% of First Bank shares are held by institutional investors. 10.6% of Ellington Financial shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Dividends

Ellington Financial pays an annual dividend of $1.80 per share and has a dividend yield of 11.5%. First Bank pays an annual dividend of $0.08 per share and has a dividend yield of 0.6%. Ellington Financial pays out 257.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. First Bank pays out 12.5% of its earnings in the form of a dividend.

Summary

Ellington Financial beats First Bank on 13 of the 15 factors compared between the two stocks.

About Ellington Financial

Ellington Financial LLC is a specialty finance company that acquires and manages mortgage-related and other financial assets. The Company’s targeted assets include residential mortgage-backed securities (RMBS), backed by loans for which the principal and interest payments are not guaranteed by a United States Government agency or a United States Government-sponsored entity, collectively referred to as non-Agency RMBS; RMBS for which the principal and interest payments are guaranteed by the United States government agency or the United States government-sponsored entity (Agency RMBS); consumer loans and asset-backed securities (ABS) backed by consumer loans; commercial mortgage-backed securities (CMBS) commercial mortgage loans and other commercial real estate debt; residential mortgage loans; collateralized loan obligations (CLOs); corporate debt and equity, including distressed debt and equity, and mortgage-related derivatives.

About First Bank

First Bank is a commercial bank. The Company provides a range of lending, deposit and other financial products and services. It operates through Community Banking segment, which is engaged in providing a range of commercial and retail and related banking services. It offers a range of lending products to meet the needs of its customers located within its market areas, including commercial and industrial loans, commercial real estate loans (including owner-occupied, investor, and multi-family loans), residential real estate loans, and consumer and other loans. It offers a range of deposit instruments, including non-interest bearing demand deposits, interest bearing demand accounts, money market accounts, savings accounts and certificates of deposit. It operates 14 branches located in Cranbury, Denville, Ewing, Flemington, Hamilton, Lawrence, Somerset, Randolph and Williamstown, New Jersey, and Trevose, Doylestown, Warminster, Bensalem and Levittown in Bucks County.

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