He notes both Ellington Financial (EFC) and Ellington Residential (EARN) cruised through the sharp rise in interest rates last year, with book values remaining largely intact. While EFC's portfolio is 85% non-agency & credit plays and 15% agency, EARN is the flip, with 85% agency and 15% non-agency.
EFC's current dividend yield is 12.8% and management expects the quarterly payout of $0.77 to continue. The board will consider a special dividend at the end of the year.
Other notes: Ellington's been talking about investing in an origination platform for about a year, and, now that mortgage originations look to have bottomed, that day appears to be getting closer. "The market is coming to us." By the end of the year, says the team, odds are good Ellington will have stakes in one or two originators.