Stock fact sheet · data as of
Ellington Credit Company (EARN): fair value, margin of safety and Wheel Score
Financial Services · Asset Management · United States · Speculative / Distressed
Is EARN undervalued?
At 3.33 (close of 16 Oct 2026), EARN trades 94% below the GLS average fair value of 55.45. That average comes from 2 models run on the latest filings, and 2 of them land above the current price. Margins of safety over 30% are the exception rather than the rule across the ~7,400 stocks we value each night, so the number earns Ellington Credit Company the full Value points in the Wheel Score - and a closer look at what the market is pricing in.
Only 2 of the nine models produced a value (10 Cap, DDM); the others need a dividend, positive free cash flow or positive book value the company does not have yet, so the average rests on a narrow base.
The nightly engine files EARN under Speculative / Distressed - negative earnings or a Piotroski score of 3 or less - which caps its Wheel Score at 45 and keeps it out of the Sunday Scan.
Nine valuation models for EARN
Each model turns the latest filed numbers into a value per share; the GLS fair value is the simple average of the ones that produce a positive number. The last two rows are shown for reference and never enter the average. The Quote page lets you switch any model off and add your own margin of safety.
| Model | Value | vs price | What it measures |
|---|---|---|---|
| DCF | - | - | Present value of the projected free cash flows, discounted at the cost of capital; no value tonight |
| Graham Number | - | - | The most a defensive investor pays for the earnings and book value per share; no value tonight |
| Graham Growth | - | - | Graham's growth formula: EPS × (8.5 + 2 × growth), adjusted for bond yields; no value tonight |
| Lynch | - | - | EPS × the earnings growth rate (PEG of 1), growth capped at 25%; no value tonight |
| GLS Growth | - | - | EPS compounded ten years at the blended growth rate, discounted back at 15% a year; no value tonight |
| 10 Cap | 96.77 | +2806% | Owner's earnings (operating cash flow less maintenance capex) capitalised at 10% |
| Payback Time | - | - | Eight years of compounded free cash flow: the price at which the business pays for itself; no value tonight |
| DDM | 14.13 | +324% | Dividend discount model: next year's dividend ÷ (10% − 3% growth); needs a dividend |
| EPV | - | - | Earnings power value: current EPS capitalised at 9% with no growth; no value tonight |
| Zombie (liquidation) | -4.12 | -224% | Current assets less all liabilities, per share: the balance-sheet floor. Not in the average |
| Wall St target | 5.00 | +50% | Analysts' average 12-month price target. Not in the average |
Quality and financial health
Financial health is weak: EARN passes 4 of the nine Piotroski tests. Our screens drop the stock at the health rule; a low score is often the reason a stock looks cheap on the valuation models. The GLS Moat score is low at 2.2 out of 10, which says the ten-year record of revenue, earnings, margins and returns on capital has been inconsistent - growth and shocks rather than steady compounding.
Returns on capital are thin or negative - ROIC -3.9%, ROE -9.4%, ROA -3.7% - with debt at 1.43 times equity and a free-cash-flow yield of 143.2%.
The dividend yield is high at 28.83% (payout ratio -24%). A yield this size is often the market's way of pricing a risk to the payout, so the health score and cash flow matter more than usual.
Institutional ownership scores 1/10, insider activity 5/10 and Congressional trading 5/10 on the GLS smart-money scales.
| Piotroski F-score | 4 / 9 | ROIC | -3.9% |
|---|---|---|---|
| GLS Moat | 2.2 / 10 | ROE | -9.4% |
| Debt / equity | 1.43 | ROA | -3.7% |
| Free-cash-flow yield | 143.2% | Payout ratio | -24% |
| Institutions | 1 / 10 | Insiders · Congress | 5 · 5 / 10 |
Wheel Score 45: Weak
EARN scores 45 out of 100 on the Wheel Score, in the Weak band (under 50), capped at 45 because the engine files it as Speculative / Distressed. Value 25/25, Health 9/20, Moat 3/15, Premium 17/20, Stability 8/20. The score is not a judgement on the company; it says the price, quality and premium do not line up for selling puts on it today.
Implied volatility is 72% on the near-the-money contracts 20-60 days out - above the 60% ceiling of the sweet spot. Premiums are large, but the Wheel Score tapers the Premium points (17 of 20) because volatility this high usually comes with a reason. Chain open interest is thin - 167 contracts across every expiry - so fills at a fair price are not guaranteed; a 30-45-day put may not exist at a usable strike.
Volume runs at 272k shares a day on a market cap of $127M, with a beta of 1.30 - a high beta, so the stock tends to move more than the market and a strike can be gapped through; the Stability part of the Wheel Score gives that 8 of 20.
| Part | Points | From | |
|---|---|---|---|
| Value | 25 / 25 | 94% margin of safety | |
| Health | 9 / 20 | Piotroski 4/9 | |
| Moat | 3 / 15 | moat 2.2/10 | |
| Premium | 17 / 20 | implied volatility 72% | |
| Stability | 8 / 20 | 272k shares/day, $127M cap, beta 1.30 |
The Wheel Score ranks ~7,400 US stocks for selling cash-secured puts and covered calls; it is updated nightly and is not a recommendation. The walkthrough lesson shows how the score fits into a trade, start to finish.
Upcoming events
The next earnings report is due on 18 Nov 2026, 33 days away; a 30-45-day put sold today would expire after it, which is worth weighing against the premium. The shares go ex-dividend on 30 Oct 2026 (0.0800 per share), so a covered call sold before then carries a small early-assignment risk around that date.
Earnings, dividend, IPO, split and economic calendars for the whole market, filterable to your watchlists.
Similar stocks in Asset Management
The 12 companies below are the closest to Ellington Credit Company by market cap within the Asset Management industry, each with its own fact sheet; the Compare page puts up to eight of them side by side.
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|---|---|---|---|---|---|
| MPA BlackRock MuniYield Pennsylvania Quality Fund | 9.81 | 26.93 | +64% | 39No options | $127M |
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| BCV Bancroft Fund Ltd. | 22.40 | 167.58 | +87% | 39No options | $130M |
| ATESX Anchor Risk Managed Equity Strategies Fund - Institutional Class | 15.57 | 1.16 | -1238% | 17No options | $133M |
| BGX Blackstone Long-Short Credit Income Fund | 10.45 | 11.20 | +7% | 39No options | $133M |
| CEE The Central and Eastern Europe Fund, Inc. | 18.59 | 182.50 | +90% | 39No options | $120M |
| VTN Invesco Trust for Investment Grade New York Municipals | 9.22 | 9.09 | -1% | 38No options | $135M |
| HEQ John Hancock Diversified Income Fund | 11.33 | 14.71 | +23% | 39No options | $135M |
| IAF Abrdn Australia Equity Fund Inc | 12.43 | 37.02 | +66% | 39No options | $119M |
| DFDV DeFi Development Corp. | 4.16 | - | - | 45Weak | $136M |
| MSD Morgan Stanley Emerging Markets Debt Fund, Inc. | 6.72 | 26.79 | +75% | 39No options | $136M |
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Start free See the Sunday ScanQuestions about EARN
Is EARN undervalued right now?
By the GLS models, yes: at 3.33 the stock is 94% below the average fair value of 55.45 (data as of 16 Oct 2026). Whether the discount is deserved is the question to research next.
What is the Wheel Score of EARN and what does it mean?
EARN scores 45 out of 100 (Weak). The Wheel Score blends the margin of safety (25 points), Piotroski health (20), the GLS moat (15), the option premium on offer (20) and trading stability (20) into one number that ranks stocks for the wheel strategy - selling cash-secured puts, then covered calls if assigned. 80 and above is Prime, 65-79 Good, 50-64 Fair, under 50 Weak.
What is the GLS fair value for EARN?
55.45 per share as of 16 Oct 2026 - the simple average of the 2 valuation models (out of nine: DCF, Graham Number, Graham Growth, Lynch, GLS Growth, 10 Cap, Payback Time, DDM and EPV) that produced a positive value. The models run every night on the latest filings; the Quote page lets you switch any of them off and add a margin of safety of your own.
When does Ellington Credit Company report earnings next?
The next earnings report is due on 18 Nov 2026, 33 days from the data date of 16 Oct 2026. The Calendars page lists every upcoming report with its time of day.
Does EARN have listed options, and how liquid are they?
Yes. The nightly snapshot found 30 listed contracts with 167 open interest across all expiries and implied volatility of 72% on the near-the-money contracts. The Options scanner lists the cash-secured put and covered call set-ups with premium and annualised yield worked out.