Ellington Financial (EFC) Could Be 52% Undervalued After Latest Book Value Update

Track your investments for FREE with Simply Wall St, the portfolio command center trusted by over 7 million individual investors worldwide.

Ellington Financial (EFC) recently reported an estimated book value of $13.61 per common share as of June 30, 2026. This figure incorporates its previously announced $0.13 monthly dividend payable on July 31.

See our latest analysis for Ellington Financial.

At a share price of $13.37, Ellington Financial has seen a 1.75% 90 day share price return and a 13.69% 1 year total shareholder return, suggesting that recent price softness contrasts with stronger income focused returns over time.

If this kind of income story has your attention, it can be useful to widen the lens and look at other opportunities as well, starting with the 18 top founder-led companies

Ellington Financial now trades a little below its latest estimated book value after a softer recent share move. Is that a reasonable entry point today, or does it make sense to wait for a wider gap before committing fresh capital?

Preferred P/E of 9.2x for Ellington Financial: Is it justified?

On the earnings side, Ellington Financial trades on a P/E of 9.2x, which looks modest compared with several benchmarks and sits against a last close of $13.37.

The P/E multiple simply compares the current share price with earnings per share and is a common way to gauge how much investors are paying for each dollar of profit. For a mortgage focused REIT such as Ellington Financial, this matters because earnings can be sensitive to funding costs, credit performance and asset valuations. The P/E therefore provides a quick snapshot of how the market is pricing that earnings stream.

Here, Ellington Financial is described as trading at good value relative to its peer set on several fronts. Its 9.2x P/E is below the estimated fair P/E of 11.3x, below the US Mortgage REITs industry average of 10.1x, and well below the broader peer average of 17.5x. In other words, the current multiple sits under levels that regression based fair value estimates and market peers suggest investors could move toward if sentiment and fundamentals stay aligned with current forecasts.

Compared with industry and peer averages, this lower P/E signals that the market is paying less for each dollar of Ellington Financial earnings than it is for many comparable stocks. If earnings and revenue growth forecasts play out as expected, that gap to the fair P/E level is one of the key valuation considerations investors are likely to assess.

Explore the SWS fair ratio for Ellington Financial

Result: Price-to-earnings of 9.2x (UNDERVALUED)

However, Ellington Financial still carries risks around the quality of its mortgage and consumer assets, and any sustained pressure on funding costs could challenge the current valuation story.

Find out about the key risks to this Ellington Financial narrative.

Another View on Ellington Financial’s Valuation

Ellington Financial also screens as undervalued on our DCF model, with the current $13.37 share price sitting well below an estimated future cash flow value of $27.77. That suggests a large cushion on paper, but how much comfort should you really take from any single model?

Look into how the SWS DCF model arrives at its fair value.

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Ellington Financial for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 49 high quality undervalued stocks. If you save a screener we even alert you when new companies match – so you never miss a potential opportunity.

Next Steps

Given that Ellington Financial shows both flagged risks and appealing rewards, it makes sense to act promptly. Test the story against your own checklist before deciding if it earns a place in your portfolio by weighing the 4 key rewards and 3 important warning signs

Looking for more Ellington Financial style investment ideas?

If Ellington Financial has sharpened your focus on valuation and income, do not stop here. Broader ideas often emerge when you compare it with other well screened stocks.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Companies discussed in this article include EFC.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com