Corporación Inmobiliaria Vesta (NYSE:VTMX) vs. Ellington Financial (NYSE:EFC) Critical Survey

Ellington Financial (NYSE:EFC) and Corporación Inmobiliaria Vesta (NYSE:VTMX) are both finance companies, but which is the better investment? We will contrast the two companies based on the strength of their analyst recommendations, earnings, institutional ownership, profitability, valuation, dividends and risk.

Institutional and Insider Ownership

55.6% of Ellington Financial shares are held by institutional investors. Comparatively, 6.9% of Corporación Inmobiliaria Vesta shares are held by institutional investors. 4.4% 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.

Analyst Ratings

This is a summary of current ratings and target prices for Ellington Financial and Corporación Inmobiliaria Vesta, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Ellington Financial	0	2	4	0	2.67
Corporación Inmobiliaria Vesta	0	0	2	0	3.00

Ellington Financial presently has a consensus price target of $13.95, suggesting a potential upside of 20.05%. Corporación Inmobiliaria Vesta has a consensus price target of $42.00, suggesting a potential upside of 18.44%. Given Ellington Financial’s higher possible upside, analysts plainly believe Ellington Financial is more favorable than Corporación Inmobiliaria Vesta.

Dividends

Ellington Financial pays an annual dividend of $1.56 per share and has a dividend yield of 13.4%. Corporación Inmobiliaria Vesta pays an annual dividend of $0.15 per share and has a dividend yield of 0.4%. Ellington Financial pays out 173.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Corporación Inmobiliaria Vesta pays out 3.0% of its earnings in the form of a dividend. Ellington Financial has increased its dividend for 1 consecutive years. Ellington Financial is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Valuation and Earnings

This table compares Ellington Financial and Corporación Inmobiliaria Vesta’s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Ellington Financial	$107.72 million	9.18	$84.81 million	$0.90	12.91
Corporación Inmobiliaria Vesta	$214.47 million	135.17	$316.64 million	$5.02	7.06

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

Profitability

This table compares Ellington Financial and Corporación Inmobiliaria Vesta’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Ellington Financial	78.53%	11.36%	0.83%
Corporación Inmobiliaria Vesta	182.61%	18.25%	11.46%

Summary

Corporación Inmobiliaria Vesta beats Ellington Financial on 9 of the 16 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 Corporación Inmobiliaria Vesta

Corporación Inmobiliaria Vesta, S.A.B. de C.V., together with its subsidiaries, acquires, develops, manages, operates, and leases industrial buildings and distribution facilities in Mexico. The company was incorporated in 1998 and is headquartered in Mexico City, Mexico.