Reviewing Peakstone Realty Trust (NYSE:PKST) & Ellington Credit (NYSE:EARN)

Peakstone Realty Trust (NYSE:PKST) and Ellington Credit (NYSE:EARN) are both small-cap finance companies, but which is the better investment? We will compare the two businesses based on the strength of their dividends, profitability, valuation, risk, institutional ownership, earnings and analyst recommendations.

Analyst Recommendations

This is a breakdown of recent ratings for Peakstone Realty Trust and Ellington Credit, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Peakstone Realty Trust	0	1	0	1	3.00
Ellington Credit	0	1	0	0	2.00

Peakstone Realty Trust currently has a consensus target price of $15.00, indicating a potential upside of 38.50%. Given Peakstone Realty Trust’s stronger consensus rating and higher probable upside, equities analysts plainly believe Peakstone Realty Trust is more favorable than Ellington Credit.

Profitability

This table compares Peakstone Realty Trust and Ellington Credit’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Peakstone Realty Trust	-18.26%	-3.61%	-1.59%
Ellington Credit	226.01%	15.81%	2.71%

Valuation and Earnings

This table compares Peakstone Realty Trust and Ellington Credit”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Peakstone Realty Trust	$254.28 million	1.55	-$550.58 million	($1.18)	-9.18
Ellington Credit	$42.55 million	4.52	$4.56 million	$1.12	5.88

Ellington Credit has lower revenue, but higher earnings than Peakstone Realty Trust. Peakstone Realty Trust is trading at a lower price-to-earnings ratio than Ellington Credit, indicating that it is currently the more affordable of the two stocks.

Dividends

Peakstone Realty Trust pays an annual dividend of $0.90 per share and has a dividend yield of 8.3%. Ellington Credit pays an annual dividend of $0.96 per share and has a dividend yield of 14.6%. Peakstone Realty Trust pays out -76.3% of its earnings in the form of a dividend. Ellington Credit pays out 85.7% 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

Peakstone Realty Trust has a beta of 2.59, indicating that its stock price is 159% more volatile than the S&P 500. Comparatively, Ellington Credit has a beta of 1.86, indicating that its stock price is 86% more volatile than the S&P 500.

Institutional and Insider Ownership

39.0% of Peakstone Realty Trust shares are held by institutional investors. Comparatively, 20.4% of Ellington Credit shares are held by institutional investors. 0.5% of Peakstone Realty Trust shares are held by company insiders. Comparatively, 1.6% of Ellington Credit shares are held 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.

Summary

Ellington Credit beats Peakstone Realty Trust on 9 of the 16 factors compared between the two stocks.

About Peakstone Realty Trust

Peakstone Realty Trust (NYSE: PKST) is an internally managed, real estate investment trust (REIT) that owns and operates a high-quality, newer-vintage portfolio of predominantly single-tenant industrial and office properties. These assets are generally leased to creditworthy tenants under long-term net lease agreements with contractual rent escalations. As of March 31, 2023, Peakstone's wholly-owned portfolio consists of 19 million square feet across 24 states in primarily high-growth, strategic coastal and sunbelt markets.

About Ellington Credit

Ellington Credit Company, a real estate investment trust, acquires, invests in, and manages residential mortgage-and real estate-related assets. It acquires and manages residential mortgage-backed securities (RMBS), including agency pools and agency collateralized mortgage obligations (CMOs); and non-agency RMBS, such as non-agency CMOs, such as investment grade and non-investment grade. The company has elected to be taxed as a real estate investment trust. As a result, it would not be subject to corporate income tax on that portion of its net income that is distributed to shareholders. The company was formerly known as Ellington Residential Mortgage REIT and changed its name to Ellington Credit Company in April 2024. Ellington Credit Company was incorporated in 2012 and is based in Old Greenwich, Connecticut.