Contrasting Ellington Financial (EFC) and CAHS China HGS Real Estate (NASDAQ:HGSH)

CAHS China HGS Real Estate (NASDAQ:HGSH) and Ellington Financial (NYSE:EFC) are both small-cap finance companies, but which is the superior investment? We will compare the two companies based on the strength of their valuation, dividends, institutional ownership, profitability, earnings, analyst recommendations and risk.

Volatility and Risk

CAHS China HGS Real Estate has a beta of 3.16, meaning that its share price is 216% more volatile than the S&P 500. Comparatively, Ellington Financial has a beta of 0.45, meaning that its share price is 55% less volatile than the S&P 500.

Analyst Recommendations

This is a summary of recent recommendations for CAHS China HGS Real Estate and Ellington Financial, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
CAHS China HGS Real Estate 0 0 0 0 N/A
Ellington Financial 0 2 2 0 2.50

Ellington Financial has a consensus price target of $18.63, indicating a potential upside of 3.07%. Given Ellington Financial’s higher probable upside, analysts plainly believe Ellington Financial is more favorable than CAHS China HGS Real Estate.

Valuation and Earnings

This table compares CAHS China HGS Real Estate and Ellington Financial’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
CAHS China HGS Real Estate $65.49 million 0.73 $5.24 million N/A N/A
Ellington Financial $135.04 million 3.98 $46.68 million $1.41 12.82

Ellington Financial has higher revenue and earnings than CAHS China HGS Real Estate.

Profitability

This table compares CAHS China HGS Real Estate and Ellington Financial’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
CAHS China HGS Real Estate 7.70% 2.70% 1.20%
Ellington Financial 34.56% 7.62% 1.27%

Dividends

Ellington Financial pays an annual dividend of $0.56 per share and has a dividend yield of 3.1%. CAHS China HGS Real Estate does not pay a dividend. Ellington Financial pays out 39.7% of its earnings in the form of a dividend.

Insider and Institutional Ownership

0.0% of CAHS China HGS Real Estate shares are held by institutional investors. Comparatively, 49.7% of Ellington Financial shares are held by institutional investors. 70.1% of CAHS China HGS Real Estate shares are held by insiders. Comparatively, 12.1% of Ellington Financial shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Summary

Ellington Financial beats CAHS China HGS Real Estate on 11 of the 14 factors compared between the two stocks.

CAHS China HGS Real Estate Company Profile

China HGS Real Estate Inc., through its subsidiaries, develops real estate properties in the People's Republic of China. The company engages in the construction and sale of residential apartments, parking lots, and commercial properties. It also develops multi-layer, sub-high-rise, and high-rise apartment buildings, as well as office buildings. In addition, the company offers various services, such as land acquisition, project planning, design management, construction management, sales and marketing, and property management. China HGS Real Estate Inc. was founded in 1995 and is headquartered in Hanzhong, the People's Republic of China.

Ellington Financial Company Profile

Ellington Financial LLC, through its subsidiary Ellington Financial Operating Partnership LLC, operates as a specialty finance company in the United States. The company acquires and manages mortgage-related assets, including residential mortgage-backed securities (RMBS) backed by prime jumbo, Alt-A, manufactured housing, and subprime residential mortgage loans; 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; commercial mortgage loans and other commercial real estate debt; and residential mortgage loans. It also provides collateralized loan obligations; mortgage-related and non-mortgage-related derivatives; equity investments in mortgage-related entities; and other strategic investments, as well as invests in corporate debt and equity securities. In addition, it offers consumer loans and asset-backed securities backed by consumer and commercial assets. Ellington Financial LLC was founded in 2007 and is based in Old Greenwich, Connecticut.

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