Cherry Hill Mortgage Investment (NYSE: CHMI) and PennyMac Mortgage Investment Trust (NYSE:PMT) are both small-cap financials companies, but which is the superior stock? We will compare the two businesses based on the strength of their earnings, analyst recommendations, institutional ownership, dividends, risk, valuation and profitability.
Institutional and Insider Ownership
58.0% of Cherry Hill Mortgage Investment shares are owned by institutional investors. Comparatively, 63.0% of PennyMac Mortgage Investment Trust shares are owned by institutional investors. 8.9% of Cherry Hill Mortgage Investment shares are owned by company insiders. Comparatively, 2.1% of PennyMac Mortgage Investment Trust shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.
Cherry Hill Mortgage Investment pays an annual dividend of $1.96 per share and has a dividend yield of 11.2%. PennyMac Mortgage Investment Trust pays an annual dividend of $1.88 per share and has a dividend yield of 11.8%. Cherry Hill Mortgage Investment pays out 29.1% of its earnings in the form of a dividend. PennyMac Mortgage Investment Trust pays out 143.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.
Volatility and Risk
Cherry Hill Mortgage Investment has a beta of 0.37, suggesting that its stock price is 63% less volatile than the S&P 500. Comparatively, PennyMac Mortgage Investment Trust has a beta of 0.52, suggesting that its stock price is 48% less volatile than the S&P 500.
This table compares Cherry Hill Mortgage Investment and PennyMac Mortgage Investment Trust’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Cherry Hill Mortgage Investment||136.70%||9.49%||1.58%|
|PennyMac Mortgage Investment Trust||36.07%||7.59%||1.75%|
Earnings and Valuation
This table compares Cherry Hill Mortgage Investment and PennyMac Mortgage Investment Trust’s top-line revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Cherry Hill Mortgage Investment||$30.72 million||7.23||$24.83 million||$6.73||2.59|
|PennyMac Mortgage Investment Trust||$272.09 million||3.83||$75.81 million||$1.31||12.15|
PennyMac Mortgage Investment Trust has higher revenue and earnings than Cherry Hill Mortgage Investment. Cherry Hill Mortgage Investment is trading at a lower price-to-earnings ratio than PennyMac Mortgage Investment Trust, indicating that it is currently the more affordable of the two stocks.
This is a summary of current recommendations for Cherry Hill Mortgage Investment and PennyMac Mortgage Investment Trust, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Cherry Hill Mortgage Investment||0||0||3||0||3.00|
|PennyMac Mortgage Investment Trust||0||2||1||0||2.33|
Cherry Hill Mortgage Investment currently has a consensus target price of $19.33, suggesting a potential upside of 10.73%. PennyMac Mortgage Investment Trust has a consensus target price of $18.50, suggesting a potential upside of 16.28%. Given PennyMac Mortgage Investment Trust’s higher possible upside, analysts clearly believe PennyMac Mortgage Investment Trust is more favorable than Cherry Hill Mortgage Investment.
About Cherry Hill Mortgage Investment
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.
About PennyMac Mortgage Investment Trust
PennyMac Mortgage Investment Trust is a specialty finance company that invests primarily in residential mortgage loans and mortgage-related assets. The Company conducts all of its operations, and makes all of its investments, through PennyMac Operating Partnership, L.P. (its Operating Partnership) and its subsidiaries. It operates through two segments: correspondent production and investment activities. Its investment activities segment represents the Company’s investments in mortgage-related assets. The correspondent production segment represents the Company’s operations aimed at serving as an intermediary between mortgage lenders and the capital markets by purchasing, pooling and reselling newly originated prime credit quality mortgage loans either directly or in the form of MBS, using the services of PNMAC Capital Management (the Manager or PCM) and PennyMac Loan Services, LLC (PLS), both indirect subsidiaries of PennyMac Financial Services, Inc. (PFSI or PennyMac).
Receive News & Ratings for Cherry Hill Mortgage Investment Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for Cherry Hill Mortgage Investment and related companies with MarketBeat.com's FREE daily email newsletter.