MTGE Investment (NASDAQ: MTGE) and Chimera Investment (NYSE:CIM) are both finance companies, but which is the superior business? We will compare the two companies based on the strength of their dividends, risk, analyst recommendations, profitability, earnings, institutional ownership and valuation.
This is a summary of recent ratings and target prices for MTGE Investment and Chimera Investment, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
This table compares MTGE Investment and Chimera Investment’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Risk and Volatility
MTGE Investment has a beta of 0.27, indicating that its share price is 73% less volatile than the S&P 500. Comparatively, Chimera Investment has a beta of 0.67, indicating that its share price is 33% less volatile than the S&P 500.
Valuation & Earnings
This table compares MTGE Investment and Chimera Investment’s top-line revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|MTGE Investment||$91.12 million||8.82||$161.33 million||$3.42||5.13|
|Chimera Investment||$1.14 billion||2.85||$524.67 million||$2.61||6.61|
Chimera Investment has higher revenue and earnings than MTGE Investment. MTGE Investment is trading at a lower price-to-earnings ratio than Chimera Investment, indicating that it is currently the more affordable of the two stocks.
MTGE Investment pays an annual dividend of $2.00 per share and has a dividend yield of 11.4%. Chimera Investment pays an annual dividend of $2.00 per share and has a dividend yield of 11.6%. MTGE Investment pays out 58.5% of its earnings in the form of a dividend. Chimera Investment pays out 76.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Chimera Investment has raised its dividend for 3 consecutive years. Chimera Investment is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Institutional & Insider Ownership
71.1% of MTGE Investment shares are owned by institutional investors. Comparatively, 50.0% of Chimera Investment shares are owned by institutional investors. 1.1% of MTGE Investment shares are owned by insiders. Comparatively, 0.7% of Chimera Investment shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.
MTGE Investment beats Chimera Investment on 9 of the 17 factors compared between the two stocks.
MTGE Investment Company Profile
MTGE Investment Corp., formerly American Capital Mortgage Investment Corp., is a real estate investment trust. The Company invests in, finances and manages a leveraged portfolio of real estate-related investments, which include agency residential mortgage-backed securities (RMBS), non-agency securities, other mortgage-related investments and other real estate investments. Agency RMBS includes residential mortgage pass-through certificates and collateralized mortgage obligations (CMOs) structured from residential mortgage pass-through certificates for which the principal and interest payments are guaranteed by a government-sponsored enterprise (GSE), or by a United States Government agency, such as Government National Mortgage Association (Ginnie Mae). Non-agency securities include securities backed by residential mortgages that are not guaranteed by a GSE or the United States Government agency, and credit risk transfer securities (CRT). The Company’s manager is MTGE Management, LLC.
Chimera Investment Company Profile
Chimera Investment Corporation is a real estate investment trust (REIT). The company is engaged in the business of investing in a portfolio of mortgage assets, including agency residential mortgage-backed security (RMBS), non-agency RMBS, agency commercial mortgage-backed securities (CMBS), residential mortgage loans and real estate related securities. The Company’s objective is to provide risk-adjusted returns to its investors over the long-term, primarily through dividends and secondarily through capital appreciation. The Company focuses to achieve this objective by investing in an investment portfolio of RMBS, agency CMBS, residential mortgage loans, commercial mortgage loans, real estate-related securities and various other asset classes. The MBS and real estate-related securities the Company purchases include investment-grade and non-investment grade classes, including the BB-rated, B-rated and non-rated classes. It also invests in investment grade and non-investment grade RMBS.
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