Critical Survey: Shanghai Industrial (SGHIY) & Ellington Financial (EFC)

Shanghai Industrial (OTCMKTS:SGHIY) and Ellington Financial (NYSE:EFC) are both multi-sector conglomerates companies, but which is the superior stock? We will contrast the two businesses based on the strength of their risk, analyst recommendations, dividends, profitability, valuation, institutional ownership and earnings.

Valuation and Earnings

This table compares Shanghai Industrial and Ellington Financial’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Shanghai Industrial $3.79 billion 0.58 $404.20 million N/A N/A
Ellington Financial $93.96 million 5.19 $33.98 million $1.08 14.98

Shanghai Industrial has higher revenue and earnings than Ellington Financial.

Volatility and Risk

Shanghai Industrial has a beta of 0.74, indicating that its stock price is 26% less volatile than the S&P 500. Comparatively, Ellington Financial has a beta of 0.4, indicating that its stock price is 60% less volatile than the S&P 500.

Institutional & Insider Ownership

46.3% of Ellington Financial shares are held by institutional investors. 11.1% of Ellington Financial shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Dividends

Shanghai Industrial pays an annual dividend of $1.19 per share and has a dividend yield of 5.9%. Ellington Financial pays an annual dividend of $1.64 per share and has a dividend yield of 10.1%. Ellington Financial pays out 151.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Profitability

This table compares Shanghai Industrial and Ellington Financial’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Shanghai Industrial N/A N/A N/A
Ellington Financial 45.70% 6.63% 1.24%

Analyst Recommendations

This is a summary of current ratings and target prices for Shanghai Industrial and Ellington Financial, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Shanghai Industrial 0 0 0 0 N/A
Ellington Financial 0 2 2 0 2.50

Ellington Financial has a consensus target price of $18.13, suggesting a potential upside of 12.02%. Given Ellington Financial’s higher probable upside, analysts clearly believe Ellington Financial is more favorable than Shanghai Industrial.

Summary

Ellington Financial beats Shanghai Industrial on 9 of the 13 factors compared between the two stocks.

Shanghai Industrial Company Profile

Shanghai Industrial Holdings Limited, an investment holding company, engages in the infrastructure facilities, real estate, and consumer products businesses in Hong Kong and the People's Republic of China. The company's Infrastructure Facilities segment invests in and operates toll road projects and water-related business. The company's Real Estate segment engages in property development activities, as well as invests in and operates a hotel. Its Consumer Products segment manufactures and sells cigarettes, packaging materials, and printed products; and offers printing services for cigarette packaging, wine packaging, and high-end molded fiber products. Shanghai Industrial Holdings Limited also issues convertible bonds. The company was incorporated in 1996 and is headquartered in Wanchai, Hong Kong and is considered as a Red Chip company due to its listing on the Hong Kong Stock Exchange. Shanghai Industrial Holdings Limited is a subsidiary of Shanghai Industrial Investment (Holdings) Company Limited.

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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