Analyzing Corporación Inmobiliaria Vesta (NYSE:VTMX) and Ellington Financial (NYSE:EFC)

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

Insider and Institutional Ownership

6.9% of Corporación Inmobiliaria Vesta shares are owned by institutional investors. Comparatively, 55.6% of Ellington Financial shares are owned by institutional investors. 4.4% of Ellington Financial shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Profitability

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

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

Valuation & Earnings

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Corporación Inmobiliaria Vesta	$214.47 million	137.84	$316.64 million	$5.02	7.20
Ellington Financial	$107.72 million	9.21	$84.81 million	$0.90	12.96

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.

Dividends

Corporación Inmobiliaria Vesta pays an annual dividend of $0.15 per share and has a dividend yield of 0.4%. Ellington Financial pays an annual dividend of $1.56 per share and has a dividend yield of 13.4%. Corporación Inmobiliaria Vesta pays out 3.0% of its earnings in the form of a dividend. 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. 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.

Analyst Recommendations

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

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

Corporación Inmobiliaria Vesta presently has a consensus target price of $42.00, suggesting a potential upside of 16.15%. Ellington Financial has a consensus target price of $13.95, suggesting a potential upside of 19.64%. Given Ellington Financial’s higher probable upside, analysts clearly believe Ellington Financial is more favorable than Corporación Inmobiliaria Vesta.

Summary

Corporación Inmobiliaria Vesta beats Ellington Financial on 9 of the 16 factors compared between the two stocks.

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.

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.