Is Ellington Credit Co. overvalued or undervalued?

As of 19 August 2025, the valuation grade for Ellington Credit Co. has moved from risky to attractive, indicating a significant improvement in its investment appeal. The company appears to be undervalued, supported by a P/E ratio of 10, a Price to Book Value of 1.11, and an EV to EBITDA of 7.30. In comparison to peers, AG Mortgage Investment Trust, Inc. has a P/E of 4.76, while Empire State Realty OP LP is considered expensive with a P/E of 45.84, highlighting Ellington's relative attractiveness in the market.
Despite its recent valuation improvement, Ellington Credit Co. has underperformed against the S&P 500 over various time frames, with a year-to-date return of -13.44% compared to the S&P 500's 12.22%. This trend continues over longer periods, with a 5-year return of -51.40% versus the S&P 500's 96.61%, suggesting that while the stock may be undervalued, it faces challenges in regaining market confidence.