Critical Analysis: New York Mortgage Trust (NYMT) vs. Chimera Investment (CIM)

New York Mortgage Trust (NASDAQ: NYMT) and Chimera Investment (NYSE:CIM) are both finance companies, but which is the superior business? We will compare the two businesses based on the strength of their earnings, profitability, analyst recommendations, dividends, risk, valuation and institutional ownership.

Institutional and Insider Ownership

38.0% of New York Mortgage Trust shares are held by institutional investors. Comparatively, 50.5% of Chimera Investment shares are held by institutional investors. 1.3% of New York Mortgage Trust shares are held by company insiders. Comparatively, 0.7% of Chimera Investment shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Risk & Volatility

New York Mortgage Trust has a beta of 1.18, indicating that its stock price is 18% more volatile than the S&P 500. Comparatively, Chimera Investment has a beta of 0.6, indicating that its stock price is 40% less volatile than the S&P 500.

Earnings & Valuation

This table compares New York Mortgage Trust and Chimera Investment’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
New York Mortgage Trust $319.31 million 1.93 $67.55 million $0.54 10.22
Chimera Investment $934.07 million 3.38 $551.94 million $3.26 5.15

Chimera Investment has higher revenue and earnings than New York Mortgage Trust. Chimera Investment is trading at a lower price-to-earnings ratio than New York Mortgage Trust, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a summary of recent ratings and target prices for New York Mortgage Trust and Chimera Investment, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
New York Mortgage Trust 0 4 1 0 2.20
Chimera Investment 0 3 2 0 2.40

New York Mortgage Trust presently has a consensus price target of $6.19, indicating a potential upside of 12.09%. Chimera Investment has a consensus price target of $18.88, indicating a potential upside of 12.42%. Given Chimera Investment’s stronger consensus rating and higher probable upside, analysts plainly believe Chimera Investment is more favorable than New York Mortgage Trust.

Profitability

This table compares New York Mortgage Trust and Chimera Investment’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
New York Mortgage Trust 20.23% 10.78% 0.74%
Chimera Investment 58.21% 13.29% 2.33%

Dividends

New York Mortgage Trust pays an annual dividend of $0.80 per share and has a dividend yield of 14.5%. Chimera Investment pays an annual dividend of $2.00 per share and has a dividend yield of 11.9%. New York Mortgage Trust pays out 148.2% 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 pays out 61.3% of its earnings in the form of a dividend. New York Mortgage Trust has raised its dividend for 3 consecutive years. New York Mortgage Trust is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

Chimera Investment beats New York Mortgage Trust on 12 of the 17 factors compared between the two stocks.

New York Mortgage Trust Company Profile

New York Mortgage Trust, Inc. is a real estate investment trust (REIT). The Company is engaged in the business of acquiring, investing in, financing and managing primarily mortgage-related assets and financial assets. The Company’s investment portfolio includes residential mortgage loans, including second mortgages and loans sourced from distressed markets, non-agency residential mortgage-backed securities (RMBS), multi-family commercial mortgage-backed securities, preferred equity and joint venture equity investments in, and mezzanine loans to, owners of multi-family properties, equity and debt securities issued by entities that invest in residential and commercial real estate and agency RMBS. It may acquire and manage various other types of mortgage-related and financial assets, including, without limitation, collateralized mortgage obligations and securities issued by newly originated residential securitizations, including credit sensitive securities from these securitizations.

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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