Ellington Credit (NYSE:EARN) versus TPG (NASDAQ:TPG) Head to Head Contrast
by Michael Walen · The Markets DailyEllington Credit (NYSE:EARN – Get Free Report) and TPG (NASDAQ:TPG – Get Free Report) are both finance companies, but which is the superior investment? We will compare the two companies based on the strength of their risk, valuation, earnings, profitability, analyst recommendations, dividends and institutional ownership.
Volatility and Risk
Ellington Credit has a beta of 1.28, indicating that its stock price is 28% more volatile than the S&P 500. Comparatively, TPG has a beta of 1.47, indicating that its stock price is 47% more volatile than the S&P 500.
Insider and Institutional Ownership
20.4% of Ellington Credit shares are held by institutional investors. Comparatively, 94.0% of TPG shares are held by institutional investors. 1.4% of Ellington Credit shares are held by company insiders. Comparatively, 61.4% of TPG shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.
Profitability
This table compares Ellington Credit and TPG’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Ellington Credit | -70.52% | N/A | N/A |
| TPG | 4.67% | 28.10% | 8.03% |
Earnings and Valuation
This table compares Ellington Credit and TPG”s revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Ellington Credit | $51.80 million | 3.21 | -$38.85 million | ($0.98) | -4.45 |
| TPG | $4.67 billion | 4.33 | $184.59 million | $0.66 | 79.77 |
TPG has higher revenue and earnings than Ellington Credit. Ellington Credit is trading at a lower price-to-earnings ratio than TPG, indicating that it is currently the more affordable of the two stocks.
Dividends
Ellington Credit pays an annual dividend of $0.96 per share and has a dividend yield of 22.0%. TPG pays an annual dividend of $2.36 per share and has a dividend yield of 4.5%. Ellington Credit pays out -98.0% of its earnings in the form of a dividend. TPG pays out 357.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Ellington Credit is clearly the better dividend stock, given its higher yield and lower payout ratio.
Analyst Ratings
This is a breakdown of recent ratings and recommmendations for Ellington Credit and TPG, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Ellington Credit | 0 | 1 | 1 | 0 | 2.50 |
| TPG | 0 | 4 | 13 | 0 | 2.76 |
Ellington Credit presently has a consensus target price of $5.50, indicating a potential upside of 26.15%. TPG has a consensus target price of $63.33, indicating a potential upside of 20.29%. Given Ellington Credit’s higher possible upside, analysts clearly believe Ellington Credit is more favorable than TPG.
Summary
TPG beats Ellington Credit on 13 of the 16 factors compared between the two stocks.
About Ellington Credit
Ellington Credit Company, a real estate investment trust, acquires, invests in, and manages residential mortgage-and real estate-related assets. It acquires and manages residential mortgage-backed securities (RMBS), including agency pools and agency collateralized mortgage obligations (CMOs); and non-agency RMBS, such as non-agency CMOs, such as investment grade and non-investment grade. 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 Ellington Residential Mortgage REIT and changed its name to Ellington Credit Company in April 2024. Ellington Credit Company was incorporated in 2012 and is based in Old Greenwich, Connecticut.
About TPG
TPG Inc. operates as an alternative asset manager in the United States and internationally. The company offers investment management services to TPG Funds, limited partners, and other vehicles. It also offers monitoring services to portfolio companies; advisory, debt and equity arrangement, and underwriting and placement services; and capital structuring and other advisory services to portfolio companies. In addition, the company invests in private equity funds, real estate funds, hedge funds, and credit funds. TPG Inc. was founded in 1992 and is based in Fort Worth, Texas. The company operates as a subsidiary of TPG GP A, LLC.