ELLINGTON CREDIT CO (EARN) Stock Fundamental Analysis
NYSE:EARN - New York Stock Exchange, Inc. - US2885781078 - REIT - Currency: USD
EARN gets a fundamental rating of 3 out of 10. The analysis compared the fundamentals against 225 industry peers in the Capital Markets industry. Both the profitability and financial health of EARN have multiple concerns. EARN has a correct valuation and a medium growth rate.
1. Profitability
1.1 Basic Checks
In the past year EARN was profitable.
In the past year EARN had a positive cash flow from operations.
The reported net income has been mixed in the past 5 years: EARN reported negative net income in multiple years.
Of the past 5 years EARN 4 years had a positive operating cash flow.
1.2 Ratios
EARN's Return On Assets of 2.80% is in line compared to the rest of the industry. EARN outperforms 51.14% of its industry peers.
EARN has a Return On Equity (10.97%) which is in line with its industry peers.
The Return On Invested Capital of EARN (0.16%) is worse than 75.34% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 2.8% | ||
| ROE | 10.97% | ||
| ROIC | 0.16% |
ROA(3y)-0.93%
ROA(5y)0.08%
ROE(3y)-9.2%
ROE(5y)-0.34%
ROIC(3y)N/A
ROIC(5y)N/A
1.3 Margins
Looking at the Profit Margin, with a value of 43.00%, EARN belongs to the top of the industry, outperforming 84.47% of the companies in the same industry.
EARN's Profit Margin has declined in the last couple of years.
EARN has a Operating Margin of 2.89%. This is in the lower half of the industry: EARN underperforms 74.89% of its industry peers.
With a Gross Margin value of 7.58%, EARN is not doing good in the industry: 73.06% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 2.89% | ||
| PM (TTM) | 43% | ||
| GM | 7.58% |
OM growth 3YN/A
OM growth 5YN/A
PM growth 3Y-47.4%
PM growth 5YN/A
GM growth 3YN/A
GM growth 5YN/A
2. Health
2.1 Basic Checks
The number of shares outstanding for EARN has been increased compared to 1 year ago.
EARN has more shares outstanding than it did 5 years ago.
Compared to 1 year ago, EARN has an improved debt to assets ratio.
2.2 Solvency
Based on the Altman-Z score of -0.74, we must say that EARN is in the distress zone and has some risk of bankruptcy.
Looking at the Altman-Z score, with a value of -0.74, EARN is doing worse than 91.32% of the companies in the same industry.
The Debt to FCF ratio of EARN is 200.09, which is on the high side as it means it would take EARN, 200.09 years of fcf income to pay off all of its debts.
Looking at the Debt to FCF ratio, with a value of 200.09, EARN is doing worse than 60.27% of the companies in the same industry.
A Debt/Equity ratio of 2.54 is on the high side and indicates that EARN has dependencies on debt financing.
EARN has a worse Debt to Equity ratio (2.54) than 81.28% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.54 | ||
| Debt/FCF | 200.09 | ||
| Altman-Z | -0.74 |
ROIC/WACCN/A
WACCN/A
2.3 Liquidity
EARN has a Current Ratio of 0.15. This is a bad value and indicates that EARN is not financially healthy enough and could expect problems in meeting its short term obligations.
EARN has a Current ratio of 0.15. This is amonst the worse of the industry: EARN underperforms 88.58% of its industry peers.
EARN has a Quick Ratio of 0.15. This is a bad value and indicates that EARN is not financially healthy enough and could expect problems in meeting its short term obligations.
The Quick ratio of EARN (0.15) is worse than 88.58% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.15 | ||
| Quick Ratio | 0.15 |
3. Growth
3.1 Past
EARN shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 40.48%, which is quite impressive.
EARN shows a decrease in Earnings Per Share. Measured over the last years, the EPS has been decreasing by -8.49% yearly.
EARN shows a strong growth in Revenue. In the last year, the Revenue has grown by 20.48%.
Measured over the past years, EARN shows a decrease in Revenue. The Revenue has been decreasing by -4.85% on average per year.
EPS 1Y (TTM)40.48%
EPS 3Y-11.95%
EPS 5Y-8.49%
EPS Q2Q%33.33%
Revenue 1Y (TTM)20.48%
Revenue growth 3Y15.91%
Revenue growth 5Y-4.85%
Sales Q2Q%533.58%
3.2 Future
The Earnings Per Share is expected to grow by 11.70% on average over the next years. This is quite good.
Based on estimates for the next years, EARN will show a very strong growth in Revenue. The Revenue will grow by 372.31% on average per year.
EPS Next Y46.18%
EPS Next 2Y16.11%
EPS Next 3Y11.7%
EPS Next 5YN/A
Revenue Next Year4038.99%
Revenue Next 2Y774.51%
Revenue Next 3Y372.32%
Revenue Next 5YN/A
3.3 Evolution
The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
4. Valuation
4.1 Price/Earnings Ratio
With a Price/Earnings ratio of 5.53, the valuation of EARN can be described as very cheap.
93.61% of the companies in the same industry are more expensive than EARN, based on the Price/Earnings ratio.
When comparing the Price/Earnings ratio of EARN to the average of the S&P500 Index (29.62), we can say EARN is valued rather cheaply.
The Price/Forward Earnings ratio is 5.62, which indicates a rather cheap valuation of EARN.
Compared to the rest of the industry, the Price/Forward Earnings ratio of EARN indicates a rather cheap valuation: EARN is cheaper than 95.89% of the companies listed in the same industry.
Compared to an average S&P500 Price/Forward Earnings ratio of 22.70, EARN is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 5.53 | ||
| Fwd PE | 5.62 |
4.2 Price Multiples
EARN's Price/Free Cash Flow ratio is in line with the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 78.16 | ||
| EV/EBITDA | N/A |
4.3 Compensation for Growth
EARN's low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
PEG (NY)0.12
PEG (5Y)N/A
EPS Next 2Y16.11%
EPS Next 3Y11.7%
5. Dividend
5.1 Amount
EARN has a Yearly Dividend Yield of 14.72%, which is a nice return.
Compared to an average industry Dividend Yield of 10.21, EARN pays a better dividend. On top of this EARN pays more dividend than 89.95% of the companies listed in the same industry.
Compared to an average S&P500 Dividend Yield of 2.27, EARN pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 14.72% |
5.2 History
The dividend of EARN decreases each year by -9.82%.
EARN has paid a dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)-9.82%
Div Incr Years0
Div Non Decr Years0
5.3 Sustainability
EARN pays out 91.69% of its income as dividend. This is not a sustainable payout ratio.
DP91.69%
EPS Next 2Y16.11%
EPS Next 3Y11.7%
6.52
-0.01 (-0.15%)
Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupFinancial Services
GICS IndustryCapital Markets
Earnings (Last)
Earnings (Next)
Inst Owners24.19%
Inst Owner Change-78.08%
Ins Owners1.1%
Ins Owner Change22.77%
Market Cap190.25M
Analysts76
Price Target7.4 (13.5%)
Short Float %3.32%
Short Ratio1.64
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 14.72% |
Yearly Dividend0.88
Dividend Growth(5Y)-9.82%
DP91.69%
Div Incr Years0
Div Non Decr Years0
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)10.94%
Min EPS beat(2)-1.96%
Max EPS beat(2)23.84%
EPS beat(4)3
Avg EPS beat(4)10.68%
Min EPS beat(4)-1.96%
Max EPS beat(4)23.84%
EPS beat(8)4
Avg EPS beat(8)0.28%
EPS beat(12)5
Avg EPS beat(12)-0.55%
EPS beat(16)6
Avg EPS beat(16)-0.9%
Revenue beat(2)0
Avg Revenue beat(2)-9.28%
Min Revenue beat(2)-11.11%
Max Revenue beat(2)-7.46%
Revenue beat(4)0
Avg Revenue beat(4)-49.01%
Min Revenue beat(4)-92.48%
Max Revenue beat(4)-7.46%
Revenue beat(8)1
Avg Revenue beat(8)-75.26%
Revenue beat(12)5
Avg Revenue beat(12)-32.59%
Revenue beat(16)8
Avg Revenue beat(16)-18.8%
PT rev (1m)0%
PT rev (3m)0%
EPS NQ rev (1m)0%
EPS NQ rev (3m)0%
EPS NY rev (1m)0%
EPS NY rev (3m)2.99%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)16.17%
Revenue NY rev (1m)0%
Revenue NY rev (3m)8.31%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 5.53 | ||
| Fwd PE | 5.62 | ||
| P/S | 3.89 | ||
| P/FCF | 78.16 | ||
| P/OCF | 78.16 | ||
| P/B | 0.99 | ||
| P/tB | 0.99 | ||
| EV/EBITDA | N/A |
EPS(TTM)1.18
EY18.1%
EPS(NY)1.16
Fwd EY17.78%
FCF(TTM)0.08
FCFY1.28%
OCF(TTM)0.08
OCFY1.28%
SpS1.68
BVpS6.57
TBVpS6.57
PEG (NY)0.12
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 2.8% | ||
| ROE | 10.97% | ||
| ROCE | 0.7% | ||
| ROIC | 0.16% | ||
| ROICexc | 0.17% | ||
| ROICexgc | 0.18% | ||
| OM | 2.89% | ||
| PM (TTM) | 43% | ||
| GM | 7.58% | ||
| FCFM | 4.98% |
ROA(3y)-0.93%
ROA(5y)0.08%
ROE(3y)-9.2%
ROE(5y)-0.34%
ROIC(3y)N/A
ROIC(5y)N/A
ROICexc(3y)N/A
ROICexc(5y)N/A
ROICexgc(3y)N/A
ROICexgc(5y)N/A
ROCE(3y)N/A
ROCE(5y)N/A
ROICexcg growth 3YN/A
ROICexcg growth 5YN/A
ROICexc growth 3YN/A
ROICexc growth 5YN/A
OM growth 3YN/A
OM growth 5YN/A
PM growth 3Y-47.4%
PM growth 5YN/A
GM growth 3YN/A
GM growth 5YN/A
F-Score7
Asset Turnover0.07
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.54 | ||
| Debt/FCF | 200.09 | ||
| Debt/EBITDA | N/A | ||
| Cap/Depr | N/A | ||
| Cap/Sales | N/A | ||
| Interest Coverage | 0.03 | ||
| Cash Conversion | N/A | ||
| Profit Quality | 11.57% | ||
| Current Ratio | 0.15 | ||
| Quick Ratio | 0.15 | ||
| Altman-Z | -0.74 |
F-Score7
WACCN/A
ROIC/WACCN/A
Cap/Depr(3y)N/A
Cap/Depr(5y)N/A
Cap/Sales(3y)N/A
Cap/Sales(5y)N/A
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)40.48%
EPS 3Y-11.95%
EPS 5Y-8.49%
EPS Q2Q%33.33%
EPS Next Y46.18%
EPS Next 2Y16.11%
EPS Next 3Y11.7%
EPS Next 5YN/A
Revenue 1Y (TTM)20.48%
Revenue growth 3Y15.91%
Revenue growth 5Y-4.85%
Sales Q2Q%533.58%
Revenue Next Year4038.99%
Revenue Next 2Y774.51%
Revenue Next 3Y372.32%
Revenue Next 5YN/A
EBIT growth 1Y123.31%
EBIT growth 3YN/A
EBIT growth 5YN/A
EBIT Next YearN/A
EBIT Next 3YN/A
EBIT Next 5YN/A
FCF growth 1Y-90.03%
FCF growth 3YN/A
FCF growth 5YN/A
OCF growth 1Y-90.03%
OCF growth 3YN/A
OCF growth 5YN/A