Head to Head Survey: Ellington Financial (NYSE:EFC) & Seven Hills Realty Trust (NASDAQ:SEVN)

Ellington Financial (NYSE:EFC) and Seven Hills Realty Trust (NASDAQ:SEVN) are both real estate companies, but which is the superior business? We will contrast the two businesses based on the strength of their analyst recommendations, dividends, institutional ownership, earnings, profitability, valuation and risk.

Institutional and Insider Ownership

55.6% of Ellington Financial shares are owned by institutional investors. 4.4% of Ellington Financial shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Analyst Ratings

This is a breakdown of current ratings and price targets for Ellington Financial and Seven Hills Realty Trust, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Ellington Financial	0	2	4	0	2.67
Seven Hills Realty Trust	0	0	3	0	3.00

Ellington Financial presently has a consensus target price of $13.85, indicating a potential upside of 5.60%. Seven Hills Realty Trust has a consensus target price of $14.67, indicating a potential upside of 2.92%. Given Ellington Financial’s higher probable upside, equities analysts clearly believe Ellington Financial is more favorable than Seven Hills Realty Trust.

Valuation & Earnings

This table compares Ellington Financial and Seven Hills Realty Trust”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Ellington Financial	$282.97 million	3.94	$84.81 million	$0.64	20.48
Seven Hills Realty Trust	$33.03 million	N/A	N/A	$1.46	9.77

Ellington Financial has higher revenue and earnings than Seven Hills Realty Trust. Seven Hills Realty 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.

Dividends

Ellington Financial pays an annual dividend of $1.56 per share and has a dividend yield of 11.9%. Seven Hills Realty Trust pays an annual dividend of $1.05 per share and has a dividend yield of 7.4%. Ellington Financial pays out 243.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Seven Hills Realty Trust pays out 72.0% of its earnings in the form of a dividend.

Profitability

This table compares Ellington Financial and Seven Hills Realty Trust’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Ellington Financial	103.55%	9.76%	0.75%
Seven Hills Realty Trust	N/A	N/A	N/A

Summary

Ellington Financial beats Seven Hills Realty Trust on 10 of the 13 factors compared between the two stocks.

About Ellington Financial

Ellington Financial Inc., through its subsidiary, Ellington Financial Operating Partnership LLC, acquires and manages mortgage-related, consumer-related, corporate-related, and other financial assets in the United States. The company acquires and manages residential mortgage-backed securities (RMBS) backed by prime jumbo, Alt-A, manufactured housing, and subprime mortgage; 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; and commercial mortgage loans and other commercial real estate debt. It also provides collateralized loan obligations; mortgage-related and non-mortgage-related derivatives; corporate debt and equity securities; corporate loans; and other strategic investments; and consumer loans and asset-backed securities backed by consumer and commercial assets. The company qualifies as a real estate investment trust (REIT) for federal income tax purposes. As a REIT, it intends to distribute at least 90% of its taxable income as dividends to shareholders. Ellington Financial LLC was incorporated in 2007 and is headquartered in Old Greenwich, Connecticut.

About Seven Hills Realty Trust

Seven Hills Realty Trust, a real estate investment trust, focuses on originating and investing in first mortgage loans secured by middle market and transitional commercial real estate in the United States. The company has elected to be taxed as a real estate investment trust. As a result, it would not be subject to corporate income tax on that portion of its net income that is distributed to shareholders. The company was formerly known as RMR Mortgage Trust. Seven Hills Realty Trust was incorporated in 2008 and is headquartered in Newton, Massachusetts.