Ellington Credit Company Common Shares of Beneficial Interest (EARN)

FairStock Score: 38/100 — MIXED

Key Financials

AI Analysis

AI-generated, general educational analysis — not personal investment advice.

I approach Ellington Credit as a closed-end fund, not a typical operating business. It invests in collateralized loan obligations, including mezzanine debt and equity tranches. That can produce high current income, but it also leaves results hostage to credit spreads, financing costs, and manager skill. The company has no revenue growth figures in the filed results I was given, so I focus on earnings power and balance sheet. In FY2022, period ended 2022-12-31, it lost $30.2 million, or $2.29 per diluted share. It recovered to $4.6 million, or $0.31 per diluted share, in FY2023 and $6.6 million, or $0.28 per diluted share, in FY2024. But in the fiscal quarter ended 2025-03-31, it lost $7.9 million, or $0.23 per diluted share, which erases much of FY2024's profit. FairStock calculations show ROE of -20.32%, ROCE of -6.64%, a debt-to-equity ratio of 1.29, a Piotroski F-Score of 2/9, and an Altman Z-Score of -0.06. Those are not signs of a fortress. The price at the close on 2026-10-13 was $3.30. FairStock calculates P/B of 0.79, P/E of 11.79, and a Graham Number of $6.14, implying a 46.25% margin of safety. The stock is categorized as a turnaround. A 22.70% dividend yield may attract income seekers, but it is often a warning when earnings are volatile. I would want evidence that CLO income can cover the distribution and that book value stops eroding.

In plain English: Ellington Credit is a small investment fund that owns pieces of pooled corporate loans. Its profits have been uneven and the latest reported quarter was a loss, so the business looks weak. At $3.30, the shares trade below the value of the fund's assets and below a conservative asset-based estimate, which may look cheap, but the very high dividend and recent losses make it risky.

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Data as of 2026-10-13 close · note generated 2026-10-15 · model deepseek-flash

Sources (SEC EDGAR): fiscal Q1 2025 10-K (period ended 2025-03-31) · fiscal Q3 2024 10-Q (period ended 2024-09-30) · fiscal Q2 2024 10-Q (period ended 2024-06-30) · fiscal Q1 2024 10-K (period ended 2024-03-31) · FY2024 10-K (period ended 2024-12-31) · FY2023 10-K (period ended 2023-12-31) · FY2022 10-K (period ended 2022-12-31)

Fundamentals from company filings and market-data providers; prices are end-of-day, not real-time. AI-generated analysis is general and educational — not personal investment advice. Scoring methodology · Score test · Disclaimer