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1. Company Snapshot

1.a. Company Description

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 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; 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.


In addition, the company offers consumer loans and asset-backed securities backed by consumer and commercial assets.Ellington Financial LLC was incorporated in 2007 and is based in Old Greenwich, Connecticut.

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1.b. Last Insights on EFC

Ellington Financial Inc. recent performance was driven by strong Q4 2024 earnings, with net income attributable to common stockholders of $22.4 million, or $0.25 per common share. The company's investment portfolio generated $25.3 million, or $0.28 per common share, and its credit strategy contributed $29.3 million, or $0.32 per common share. Additionally, the company declared a monthly dividend of $0.13 per share of common stock, payable on March 25, 2025 to stockholders of record as of February 28, 2025. This positive dividend activity is a testament to the company's commitment to returning value to shareholders.

1.c. Company Highlights

2. Ellington Financial Inc. Delivers Strong Q4 Results

Ellington Financial Inc. reported adjusted distributable earnings (ADE) of $0.47 per share for the fourth quarter, exceeding their dividend of $0.39 per share. The company's GAAP net income came in at $0.14 per common share on a fully mark-to-market basis. The results were driven by exceptional performance in their loan origination and securitization platforms, particularly from their Longbridge segment, as well as excellent credit performance across their residential and commercial loan portfolios. JR Herlihy noted that the adjusted long credit portfolio increased by 15% to $4.1 billion quarter over quarter.

Publication Date: Mar -03

📋 Highlights
  • Adjusted Distributable Earnings (ADE) Surpass Dividends:: ADE of $0.47/share exceeded dividends of $0.39/share in Q4 2025.
  • Unsecured Notes Offering Expands Capital Structure:: Completed a $400 million unsecured notes offering, the largest in the company’s history.
  • Portfolio Growth Accelerates:: Total long agency RMBS portfolio reached $4.1 billion (15% QoQ increase), with total portfolio expanding to $5 billion (20% YoY growth).
  • Securitization Momentum:: Executed seven securitizations in Q4 2025 and maintained 25 securitizations in 2025 vs. seven in 2024.
  • Leverage Optimization:: Recourse debt-to-equity ratio rose to 1.9:1, while unencumbered assets grew by 45% in Q4.

Capital Structure Optimization

The company continued to focus on optimizing its capital structure, completing a $400 million unsecured notes offering, their largest to date, and using a portion of the proceeds to reduce short-term repo financing. They also capitalized on the strength of the securitization market, completing seven additional securitizations over the course of the quarter. As a result, they almost doubled the proportion of their total recourse borrowings represented by long-term non-mark-to-market borrowings and increased their unencumbered assets by about 45%.

Portfolio Growth and Diversification

Ellington Financial Inc.'s total long credit portfolio grew significantly, driven by the company's loan origination and securitization capabilities. Mark Tecotzky highlighted that their securitization platform now encompasses a variety of loan types, including second liens, reverse mortgages, and residential transition loans. The company's portfolio is diversified across different asset classes, with a strong focus on credit performance and risk management.

Valuation and Outlook

With a Price-to-Book Ratio (P/B) of 0.68, the company's valuation appears reasonable. Analysts estimate revenue growth of 1.4% for the next year. Given the company's strong Q4 results and diversified portfolio, they are well-positioned for future growth. The actual EPS of $0.47 beat estimates of $0.44, indicating a positive surprise. As Laurence Penn mentioned, the company is focusing on growing their loan origination market share while maintaining strong credit performance, which should drive disciplined portfolio growth.

Dividend Yield and Return on Equity

The company's Dividend Yield is 12.52%, which is attractive for income investors. Additionally, their Return on Equity (ROE) is 8.54%, indicating a reasonable level of profitability. With a strong capital structure and diversified portfolio, Ellington Financial Inc. is poised for future success.

3. NewsRoom

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Ellington Financial Announces Estimated Book Value Per Common Share as of January 31, 2026

Mar -05

Source: businesswire.com

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Down 5% in 4 Weeks, Here's Why You Should You Buy the Dip in Ellington Financial (EFC)

Mar -05

Source: zacks.com

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Ellington Financial Inc. (EFC) Q4 2025 Earnings Call Transcript

Feb -26

Source: seekingalpha.com

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Ellington Financial Inc. Reports Fourth Quarter 2025 Results

Feb -25

Source: businesswire.com

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Exceptional Returns With Low Volatility: Why I Exited Ellington Financial Series B Preferred Share

Feb -22

Source: seekingalpha.com

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Buy 5 IDEAL S&P 600 Small/MidCap 'Safer' February DiviDogs

Feb -13

Source: seekingalpha.com

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Ellington Financial Announces Release Date of Fourth Quarter 2025 Earnings, Conference Call, and Investor Presentation

Feb -11

Source: businesswire.com

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Rep. Virginia Foxx Sells Hercules Capital, Inc. (NYSE:HTGC) Shares

Feb -10

Source: defenseworld.net

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (6.49%)

6. Segments

Investment Portfolio

Expected Growth: 7.5%

Ellington Financial Inc.'s diversified portfolio of mortgage-backed securities, loans, and other financial assets provides a stable source of income, driven by increasing demand for mortgage financing and growing housing market, as well as the company's expertise in actively managing its portfolio.

Longbridge

Expected Growth: 4.5%

The mortgage-backed securities trust is expected to grow driven by increasing demand for housing, low interest rates, and government-backed guarantees, resulting in a stable income stream for investors.

Corporate/Other

Expected Growth: 4.5%

The Corporate/Other segment of Ellington Financial Inc. is expected to grow driven by the company's diversified investment portfolio, strategic asset allocation, and effective risk management practices, which will contribute to its residual category of assets, liabilities, and equity.

7. Detailed Products

Agency RMBS

Ellington Financial invests in and manages a portfolio of agency residential mortgage-backed securities (RMBS), which are backed by the full faith and credit of the US government.

Non-Agency RMBS

Ellington Financial invests in and manages a portfolio of non-agency residential mortgage-backed securities (RMBS), which are not backed by the US government.

Commercial Mortgage-Backed Securities (CMBS)

Ellington Financial invests in and manages a portfolio of commercial mortgage-backed securities (CMBS), which are backed by commercial properties.

Asset-Backed Securities (ABS)

Ellington Financial invests in and manages a portfolio of asset-backed securities (ABS), which are backed by a pool of assets such as auto loans, credit card receivables, and student loans.

Corporate Debt

Ellington Financial invests in and manages a portfolio of corporate debt securities, including high-yield bonds and leveraged loans.

Equities

Ellington Financial invests in and manages a portfolio of equities, including common stocks and preferred stocks.

Mortgage Servicing Rights (MSR)

Ellington Financial invests in and manages a portfolio of mortgage servicing rights (MSR), which represent the right to service mortgage loans.

8. Ellington Financial Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Ellington Financial Inc. operates in a niche market with limited substitutes, reducing the threat of substitutes.

Bargaining Power Of Customers

Ellington Financial Inc. has a diverse customer base, reducing the bargaining power of individual customers.

Bargaining Power Of Suppliers

Ellington Financial Inc. relies on a few key suppliers, giving them some bargaining power, but the company's size and reputation mitigate this threat.

Threat Of New Entrants

The financial services industry is highly competitive, and new entrants can easily disrupt the market, posing a significant threat to Ellington Financial Inc.

Intensity Of Rivalry

The financial services industry is highly competitive, with many established players, leading to intense rivalry and competition for market share.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 89.78%
Debt Cost 3.95%
Equity Weight 10.22%
Equity Cost 13.49%
WACC 4.92%
Leverage 878.93%

11. Quality Control: Ellington Financial Inc. passed 3 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
Ellington Financial

A-Score: 7.0/10

Value: 5.9

Growth: 2.4

Quality: 6.0

Yield: 10.0

Momentum: 7.5

Volatility: 10.0

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Franklin BSP Realty Trust

A-Score: 6.7/10

Value: 6.6

Growth: 6.8

Quality: 4.5

Yield: 10.0

Momentum: 3.0

Volatility: 9.3

1-Year Total Return ->

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Ladder Capital

A-Score: 6.6/10

Value: 5.8

Growth: 4.2

Quality: 5.4

Yield: 10.0

Momentum: 4.5

Volatility: 9.7

1-Year Total Return ->

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Manhattan Bridge Capital

A-Score: 6.4/10

Value: 5.2

Growth: 4.9

Quality: 8.1

Yield: 10.0

Momentum: 1.5

Volatility: 8.7

1-Year Total Return ->

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Stock-Card
Ready Capital

A-Score: 5.2/10

Value: 7.6

Growth: 5.4

Quality: 2.8

Yield: 10.0

Momentum: 0.5

Volatility: 4.7

1-Year Total Return ->

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Sachem Capital

A-Score: 4.8/10

Value: 7.8

Growth: 4.0

Quality: 2.8

Yield: 10.0

Momentum: 0.5

Volatility: 3.7

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

12.03$

Current Price

12.03$

Potential

-0.00%

Expected Cash-Flows