Head-To-Head Survey: Caretrust REIT (CTRE) & Ellington Residential Mortgage REIT (EARN)

Caretrust REIT (NASDAQ:CTRE) and Ellington Residential Mortgage REIT (NYSE:EARN) are both small-cap finance companies, but which is the superior investment? We will contrast the two businesses based on the strength of their profitability, risk, dividends, valuation, analyst recommendations, earnings and institutional ownership.

Analyst Ratings

This is a summary of recent ratings and price targets for Caretrust REIT and Ellington Residential Mortgage REIT, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Caretrust REIT 0 4 4 0 2.50
Ellington Residential Mortgage REIT 0 0 0 0 N/A

Caretrust REIT currently has a consensus target price of $18.13, indicating a potential upside of 3.87%. Given Caretrust REIT’s higher probable upside, equities research analysts plainly believe Caretrust REIT is more favorable than Ellington Residential Mortgage REIT.

Earnings & Valuation

This table compares Caretrust REIT and Ellington Residential Mortgage REIT’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Caretrust REIT $132.98 million 10.63 $25.87 million $1.16 15.04
Ellington Residential Mortgage REIT $30.14 million 4.93 $10.78 million $1.80 6.51

Caretrust REIT has higher revenue and earnings than Ellington Residential Mortgage REIT. Ellington Residential Mortgage REIT is trading at a lower price-to-earnings ratio than Caretrust REIT, indicating that it is currently the more affordable of the two stocks.

Dividends

Caretrust REIT pays an annual dividend of $0.82 per share and has a dividend yield of 4.7%. Ellington Residential Mortgage REIT pays an annual dividend of $1.48 per share and has a dividend yield of 12.6%. Caretrust REIT pays out 70.7% of its earnings in the form of a dividend. Ellington Residential Mortgage REIT pays out 82.2% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Caretrust REIT has raised its dividend for 2 consecutive years.

Profitability

This table compares Caretrust REIT and Ellington Residential Mortgage REIT’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Caretrust REIT 28.26% 6.81% 3.50%
Ellington Residential Mortgage REIT 14.42% 9.27% 0.93%

Volatility and Risk

Caretrust REIT has a beta of 0.81, suggesting that its stock price is 19% less volatile than the S&P 500. Comparatively, Ellington Residential Mortgage REIT has a beta of 0.5, suggesting that its stock price is 50% less volatile than the S&P 500.

Institutional & Insider Ownership

88.1% of Caretrust REIT shares are held by institutional investors. Comparatively, 63.5% of Ellington Residential Mortgage REIT shares are held by institutional investors. 1.6% of Caretrust REIT shares are held by insiders. Comparatively, 2.0% of Ellington Residential Mortgage REIT shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Summary

Caretrust REIT beats Ellington Residential Mortgage REIT on 12 of the 16 factors compared between the two stocks.

Caretrust REIT Company Profile

CareTrust REIT, Inc. is a self-administered, publicly-traded real estate investment trust engaged in the ownership, acquisition and leasing of seniors housing and healthcare-related properties. With 189 net-leased healthcare properties and three operated seniors housing properties in 25 states, CareTrust REIT is pursuing opportunities across the nation to acquire properties that will be leased to a diverse group of local, regional and national seniors housing operators, healthcare services providers, and other healthcare-related businesses.

Ellington Residential Mortgage REIT Company Profile

Ellington Residential Mortgage REIT, a real estate investment trust, specializes in acquiring, investing in, and managing 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 comprising 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. Ellington Residential Mortgage REIT was founded in 2012 and is based in Old Greenwich, Connecticut.

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