Consorcio Ara SAB de CV (OTCMKTS:CNRFF) and Ellington Financial (NYSE:EFC) are both small-cap construction companies, but which is the better business? We will compare the two companies based on the strength of their profitability, analyst recommendations, dividends, earnings, risk, valuation and institutional ownership.

Analyst Ratings

This is a summary of current ratings and recommmendations for Consorcio Ara SAB de CV and Ellington Financial, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Consorcio Ara SAB de CV 0 0 0 0 N/A
Ellington Financial 0 1 1 0 2.50

Ellington Financial has a consensus target price of $19.00, suggesting a potential upside of 7.28%. Given Ellington Financial’s higher probable upside, analysts plainly believe Ellington Financial is more favorable than Consorcio Ara SAB de CV.

Profitability

This table compares Consorcio Ara SAB de CV and Ellington Financial’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Consorcio Ara SAB de CV 9.99% 6.23% 4.06%
Ellington Financial 21.99% 8.67% 1.48%

Dividends

Ellington Financial pays an annual dividend of $1.68 per share and has a dividend yield of 9.5%. Consorcio Ara SAB de CV does not pay a dividend. Ellington Financial pays out 119.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Risk and Volatility

Consorcio Ara SAB de CV has a beta of 1.06, indicating that its stock price is 6% more volatile than the S&P 500. Comparatively, Ellington Financial has a beta of 0.45, indicating that its stock price is 55% less volatile than the S&P 500.

Institutional & Insider Ownership

53.7% of Ellington Financial shares are owned by institutional investors. 12.1% of Ellington Financial shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Earnings and Valuation

This table compares Consorcio Ara SAB de CV and Ellington Financial’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Consorcio Ara SAB de CV $427.74 million 0.58 $42.93 million N/A N/A
Ellington Financial $135.04 million 3.90 $46.68 million $1.41 12.56

Ellington Financial has lower revenue, but higher earnings than Consorcio Ara SAB de CV.

Summary

Ellington Financial beats Consorcio Ara SAB de CV on 9 of the 13 factors compared between the two stocks.

Consorcio Ara SAB de CV Company Profile

Consorcio ARA, S. A. B. de C. V., together with its subsidiaries, designs, develops, constructs, and markets entry-level and middle-income residential housing developments in Mexico. It markets commercial and industrial developments; and rents mini-supermarkets under operating leases. The company also purchases and sells land; provides supplier services; and develops and leases shopping malls and commercial premises. As of December 31, 2017, it had a land bank of approximately 35.2 million square meters, as well as operated 6 shopping malls. The company was founded in 1977 and is based in Mexico City, Mexico.

Ellington Financial Company Profile

Ellington Financial LLC, through its subsidiary Ellington Financial Operating Partnership LLC, operates as a specialty finance company in the United States. The company acquires and manages mortgage-related assets, including 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; commercial mortgage loans and other commercial real estate debt; and residential mortgage loans. It also provides collateralized loan obligations; mortgage-related and non-mortgage-related derivatives; equity investments in mortgage-related entities; and other strategic investments, as well as invests in corporate debt and equity securities. In addition, it offers consumer loans and asset-backed securities backed by consumer and commercial assets. Ellington Financial LLC was founded in 2007 and is based in Old Greenwich, Connecticut.

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