Ellington Credit Company
- Open
- 4.42
- Day high
- 4.43
- Day low
- 4.32
- Prev close
- 4.42
- Volume
- 677K
- Mkt cap
- $163M
- P/E (TTM)
- —
- EPS (TTM)
- —
- P/B
- 1.1
- P/S
- 3.0
- Yield
- 22.12%
- Per share
- $0.96
Ellington Credit Company (EARN) is a Financial Services company listed on NYSE. The stock is down 25% over the past year.
Ellington Credit Company (EARN) financials & analyst ratings
Fundamentals (TTM)
Source: exchange market data + company filings. Figures are trailing-twelve-month or as most recently reported. For informational purposes only — not investment advice.
EARN earnings date, history & EPS estimates
| Report date | EPS est | EPS actual | Surprise | Revenue | Rev. surprise |
|---|---|---|---|---|---|
| May 20, 2026 | $0.22 | $0.19 | -13.6% | $12M | +16.4% |
| Mar 5, 2026 | $0.24 | $0.21 | -12.5% | $14M | +12.9% |
| Nov 19, 2025 | $0.20 | $0.23 | +15.0% | $15M | +35.1% |
| Aug 19, 2025 | $0.24 | $0.18 | -24.6% | $10M | -18.8% |
| May 20, 2025 | $0.27 | $0.26 | -3.7% | $19M | +131.4% |
| Mar 6, 2024 | $0.23 | $0.27 | +17.4% | $2M | -44.1% |
| Nov 13, 2023 | $0.25 | $0.21 | -16.0% | $-10M | -1031.9% |
| Aug 10, 2023 | $0.24 | $0.17 | -29.2% | $3M | +15.0% |
| May 11, 2023 | $0.24 | $0.21 | -12.5% | $4M | +14.9% |
| Mar 6, 2023 | $0.20 | $0.25 | +25.0% | $13M | +265.3% |
| Nov 9, 2022 | $0.23 | $0.23 | +0.0% | $5M | +35.5% |
| Aug 10, 2022 | $0.30 | $0.28 | -6.7% | $-9M | -294.6% |
EARN insider trading activity (SEC Form 4)
| Date | Insider | Type | Shares | Price |
|---|---|---|---|---|
| Jan 5, 2026 | Smernoff Chrisofficer: Chief Financial Officer | Tax | 2,468 | $5.17 |
| Jan 5, 2026 | Herlihy Johnofficer: Chief Operating Officer | Tax | 5,235 | $5.17 |
| Oct 2, 2025 | SIMON RONALD Idirector | Buy | 10,536 | $5.68 |
| Oct 2, 2025 | Borenstein Gregory Morrisofficer: Portfolio Manager | Buy | 3,000 | $5.29 |
| Sep 9, 2025 | Borenstein Gregory Morrisofficer: Portfolio Manager | Buy | 4,000 | $5.62 |
| Apr 10, 2025 | Borenstein Gregory Morrisofficer: Portfolio Manager | Buy | 8,000 | $4.73 |
| Jan 2, 2025 | Herlihy Johnofficer: Chief Operating Officer | Tax | 2,845 | $6.83 |
| Jan 2, 2025 | Smernoff Chrisofficer: Chief Financial Officer | Tax | 1,318 | $6.83 |
| Dec 20, 2024 | Smernoff Chrisofficer: Chief Financial Officer | Grant | 7,995 | — |
| Dec 20, 2024 | Herlihy Johnofficer: Chief Operating Officer | Grant | 24,346 | — |
| Sep 13, 2024 | SIMON RONALD Idirector | Grant | 14,472 | — |
| Sep 13, 2024 | Miller Daviddirector | Grant | 14,472 | — |
| Sep 13, 2024 | Allardice Robert B. IIIdirector | Grant | 14,472 | — |
| Sep 13, 2024 | McBride Mary Edirector | Grant | 14,472 | — |
| Jan 2, 2024 | Smernoff Chrisofficer: Chief Financial Officer | Tax | 1,210 | $6.31 |
Source: EARN SEC Form 4 filings, latest Jan 5, 2026. For informational purposes only — not investment advice.
See the full EARN insider & 13F page →Ellington Credit Company company profile
Overview
Ellington Residential Mortgage REIT (NYSE:EARN) is a real estate investment trust incorporated in 2012 and based in Old Greenwich, Connecticut. The company went public in May 2013 and originally focused on investing in residential mortgage-backed securities. In 2024, the company underwent a significant strategic transformation, converting from a traditional mortgage REIT to a closed-end fund focused on collateralized loan obligations (CLOs) and changing its name to Ellington Credit Company. This transformation reflects management's strategic pivot away from interest rate-sensitive mortgage securities toward credit-focused investments that they believe offer superior risk-adjusted returns.
Business
Ellington Credit Company operates in the specialized world of structured credit investments, primarily focusing on collateralized loan obligations (CLOs). CLOs are complex financial instruments that pool together hundreds of corporate loans - typically leveraged loans made to below-investment-grade companies - and then slice them into different tranches with varying risk and return profiles. Think of it like a layered cake where the bottom layers (equity and mezzanine tranches) absorb losses first but receive higher returns, while the top layers (senior tranches) are safer but offer lower yields. The company's investment strategy centers on two main areas. First, CLO equity investments, which represent the riskiest but highest-returning portion of CLO structures, currently comprising about 58% of their CLO holdings. These equity positions receive residual cash flows after all debt tranches are paid, making them sensitive to the credit performance of underlying corporate loans. Second, CLO mezzanine debt tranches (typically BBB-rated and below), which offer more predictable coupon payments but still carry meaningful credit risk. Prior to its 2024 transformation, the company invested primarily in residential mortgage-backed securities (RMBS), including both agency RMBS (guaranteed by government-sponsored enterprises like Fannie Mae and Freddie Mac) and non-agency RMBS (without government backing). However, the company has largely exited this business, reducing its agency RMBS portfolio from over $700 million to approximately $462 million by Q3 2024, with plans to further reduce these holdings. The company also maintains smaller positions in European CLOs (about 17% of CLO holdings) and legacy non-agency mortgage securities. As of Q3 2024, CLOs represented approximately 72% of the company's invested capital, marking a dramatic shift from less than 20% just two years earlier.
Competitive moat
Ellington Credit Company operates in a niche market that requires specialized expertise, but its competitive moat is relatively narrow. The company's primary advantage lies in its specialized knowledge and experience in structured credit markets, particularly in CLO analysis and valuation. This expertise allows management to identify mispriced securities and navigate complex credit structures that may be too specialized for generalist investors. The CLO market itself provides some natural barriers to entry due to its complexity and the substantial analytical resources required to properly evaluate hundreds of underlying corporate loans across multiple CLO structures. The company benefits from established relationships with CLO managers and broker-dealers, which can provide access to attractive investment opportunities and market intelligence. However, the company faces significant competitive pressures. Large institutional investors including insurance companies, pension funds, and dedicated credit funds compete for the same CLO investments, often with substantially more capital and potentially lower cost of funds. Private credit funds represent a growing competitive threat, as they can originate loans directly rather than purchasing them in the secondary market, potentially offering better risk-adjusted returns. The company's small size (approximately $200 million market capitalization) limits its ability to diversify across numerous CLO positions and may restrict access to the largest and most attractive investment opportunities. Regulatory changes could also erode any competitive advantages, particularly if banking regulations change to allow more traditional financial institutions to increase their CLO investments. The transformation to a closed-end fund structure provides some protection against forced asset sales during market stress, but this advantage is available to other funds as well. Overall, while the company operates in a specialized niche, its moat is primarily based on management expertise rather than structural competitive advantages, making it vulnerable to larger, better-capitalized competitors.
Risks & safety
The company presents a mixed margin of safety profile with moderate financial stability but significant market risk exposure. • Liquidity position: Strong with $31.8 million in cash and short-term investments, representing about 15% of total assets, providing adequate cushion for operational needs and investment opportunities. • Debt structure: No traditional corporate debt (debt-to-equity ratio of 0.0), but substantial repo financing of $630 million against securities holdings, creating a leverage ratio of approximately 2.5:1, which is manageable but amplifies portfolio volatility. • Current ratio: Extremely low at 0.12, reflecting the nature of repo financing where securities serve as collateral, but this structure requires careful liquidity management to avoid forced sales. • Solvency risk: Moderate, as the company depends on short-term repo financing that must be rolled over regularly; any disruption in funding markets could force asset sales at unfavorable prices. • Valuation metrics: Trading at 0.98x book value, suggesting the market values the portfolio at approximately fair value; P/E ratio of 27x reflects volatile earnings but recent profitability. • Earnings stability: Highly volatile due to mark-to-market accounting on securities portfolios; adjusted distributable earnings provide better indication of underlying cash generation capability. • Dividend coverage: Current monthly dividend of $0.08 per share appears sustainable based on net interest margin expansion and CLO portfolio yields, but remains subject to credit and market performance.
Recent development
The company has undergone a dramatic strategic transformation over the past two years, fundamentally changing its business model and investment focus. The most significant development was the conversion from a traditional mortgage REIT to a closed-end fund focused on CLOs, completed in April 2024. This transformation included revoking the company's REIT election, changing its name to Ellington Credit Company, and converting to a regulated investment company (RIC) structure under the Investment Company Act of 1940. The portfolio rotation has been equally dramatic. CLO investments grew from less than $20 million in early 2023 to $171 million by the end of 2024, while agency RMBS holdings decreased from over $700 million to approximately $462 million. Management expects to complete the transition to a predominantly CLO-focused portfolio by mid-2024, with CLOs potentially representing up to 90% of invested capital. The company has also significantly reduced its leverage from over 7:1 debt-to-equity in 2022 to approximately 2.5:1 currently, reflecting both the strategic shift away from agency RMBS (which typically require higher leverage to generate attractive returns) and a more conservative approach to risk management. This deleveraging has contributed to improved net interest margins, expanding from 1.34% to over 4% as the company rotated into higher-yielding CLO investments. Geographic diversification has been another key development, with the company adding European CLO investments that now represent about 17% of total CLO holdings. Management has also focused on optimizing the mix between CLO equity and mezzanine debt tranches, with equity positions currently comprising 58% of CLO holdings, allowing the company to capture higher returns while maintaining some downside protection through mezzanine investments. The conversion to closed-end fund status provides several strategic advantages, including enhanced access to capital markets, potential tax efficiencies, and additional investor protections under the 1940 Act. Management believes this structure better aligns with their investment strategy and provides more stable capital for long-term investing in illiquid credit securities.
EARN company profile · for informational purposes only — not investment advice.
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