Cherry Hill Mortgage Investment Corporation (NYSE: CHMI) and Hatteras Financial Corp. (NYSE:HTS) are both finance companies, but which is the better business? We will contrast the two businesses based on the strength of their institutional ownership, valuation, dividends, earnings, analyst recommendations, profitabiliy and risk.

Valuation and Earnings

This table compares Cherry Hill Mortgage Investment Corporation and Hatteras Financial Corp.’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Cherry Hill Mortgage Investment Corporation $67.37 million 3.59 $90.68 million $7.14 2.67
Hatteras Financial Corp. N/A N/A N/A $0.31 52.55

Cherry Hill Mortgage Investment Corporation has higher revenue and earnings than Hatteras Financial Corp.. Cherry Hill Mortgage Investment Corporation is trading at a lower price-to-earnings ratio than Hatteras Financial Corp., indicating that it is currently the more affordable of the two stocks.

Dividends

Cherry Hill Mortgage Investment Corporation pays an annual dividend of $1.96 per share and has a dividend yield of 10.3%. Hatteras Financial Corp. pays an annual dividend of $1.80 per share and has a dividend yield of 11.0%. Cherry Hill Mortgage Investment Corporation pays out 27.5% of its earnings in the form of a dividend. Hatteras Financial Corp. pays out 580.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Institutional & Insider Ownership

47.9% of Cherry Hill Mortgage Investment Corporation shares are held by institutional investors. 8.9% of Cherry Hill Mortgage Investment Corporation shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Profitability

This table compares Cherry Hill Mortgage Investment Corporation and Hatteras Financial Corp.’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Cherry Hill Mortgage Investment Corporation 155.62% 9.35% 1.95%
Hatteras Financial Corp. N/A -16.93% -1.89%

Risk & Volatility

Cherry Hill Mortgage Investment Corporation has a beta of 0.37, suggesting that its share price is 63% less volatile than the S&P 500. Comparatively, Hatteras Financial Corp. has a beta of 0.3, suggesting that its share price is 70% less volatile than the S&P 500.

Analyst Recommendations

This is a summary of recent ratings for Cherry Hill Mortgage Investment Corporation and Hatteras Financial Corp., as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Cherry Hill Mortgage Investment Corporation 0 2 2 0 2.50
Hatteras Financial Corp. 0 0 0 0 N/A

Cherry Hill Mortgage Investment Corporation presently has a consensus target price of $18.50, suggesting a potential downside of 2.94%. Given Cherry Hill Mortgage Investment Corporation’s higher probable upside, equities research analysts clearly believe Cherry Hill Mortgage Investment Corporation is more favorable than Hatteras Financial Corp..

Summary

Cherry Hill Mortgage Investment Corporation beats Hatteras Financial Corp. on 11 of the 12 factors compared between the two stocks.

Cherry Hill Mortgage Investment Corporation Company Profile

Cherry Hill Mortgage Investment Corporation is a residential real estate finance company. The Company is focused on acquiring, investing in and managing residential mortgage assets in the United States. Its principal objective is to generate attractive current yields and risk-adjusted total returns for its stockholders over the long term, primarily through dividend distributions and secondarily through capital appreciation. The Company focuses on attaining this objective, subject to market conditions and availability and terms of financing, by selectively constructing and managing a targeted portfolio of Servicing Related Assets, residential mortgage-backed securities (RMBS), prime mortgage loans and other cashflowing residential mortgage assets. The Company operates its business through segments, including investments in RMBS; investments in Servicing Related Assets, and All Other. The Company is externally managed by Cherry Hill Mortgage Management, LLC.

Hatteras Financial Corp. Company Profile

Hatteras Financial Corp. is an externally managed mortgage real estate investment trust (REIT) that invests in single-family residential mortgage real estate assets, such as mortgage-backed security (MBS), mortgage servicing right (MSR), residential mortgage loans and other financial assets. MBS are pass-through securities consisting of a pool of mortgage loans. Its primary business is owning and managing agency securities, with a primary focus on adjustable-rate mortgage securities. Its primary investment assets include Agency MBS; other agency issued securities, such as credit-risk transfer bonds; MSR; non-agency securities; residential mortgage loans, and other real estate related assets as permitted by its investment guidelines and REIT requirements. Its business operations consist of the Hatteras Financial Corp., Onslow Bay Financial LLC, First Winston Securities, Inc. and Wind River TRS LLC. It is externally managed and advised by its manager, Atlantic Capital Advisors LLC.

Receive News & Ratings for Cherry Hill Mortgage Investment Corporation Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for Cherry Hill Mortgage Investment Corporation and related companies with MarketBeat.com's FREE daily email newsletter.