Chimera Investment (NYSE:CIM – Get Free Report) and MFA Financial (NYSE:MFA – Get Free Report) are both small-cap finance companies, but which is the better stock? We will compare the two companies based on the strength of their valuation, earnings, analyst recommendations, institutional ownership, dividends, profitability and risk.
Institutional & Insider Ownership
48.4% of Chimera Investment shares are owned by institutional investors. Comparatively, 65.3% of MFA Financial shares are owned by institutional investors. 1.8% of Chimera Investment shares are owned by insiders. Comparatively, 1.0% of MFA Financial shares are owned by 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.
Volatility and Risk
Chimera Investment has a beta of 1.72, meaning that its stock price is 72% more volatile than the S&P 500. Comparatively, MFA Financial has a beta of 1.45, meaning that its stock price is 45% more volatile than the S&P 500.
Valuation and Earnings
This table compares Chimera Investment and MFA Financial”s revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Chimera Investment | $821.34 million | 0.85 | $230.50 million | ($1.02) | -8.14 |
| MFA Financial | $745.06 million | 0.90 | $176.78 million | $1.00 | 6.66 |
Chimera Investment has higher revenue and earnings than MFA Financial. Chimera Investment is trading at a lower price-to-earnings ratio than MFA Financial, indicating that it is currently the more affordable of the two stocks.
Profitability
This table compares Chimera Investment and MFA Financial’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Chimera Investment | 0.14% | 9.82% | 1.56% |
| MFA Financial | 19.38% | 7.58% | 1.05% |
Analyst Recommendations
This is a breakdown of current ratings and recommmendations for Chimera Investment and MFA Financial, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Chimera Investment | 1 | 2 | 1 | 0 | 2.00 |
| MFA Financial | 1 | 2 | 4 | 0 | 2.43 |
Chimera Investment currently has a consensus target price of $14.50, indicating a potential upside of 74.70%. MFA Financial has a consensus target price of $9.79, indicating a potential upside of 47.02%. Given Chimera Investment’s higher possible upside, equities analysts plainly believe Chimera Investment is more favorable than MFA Financial.
Dividends
Chimera Investment pays an annual dividend of $1.80 per share and has a dividend yield of 21.7%. MFA Financial pays an annual dividend of $1.44 per share and has a dividend yield of 21.6%. Chimera Investment pays out -176.5% of its earnings in the form of a dividend. MFA Financial pays out 144.0% 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 increased its dividend for 1 consecutive years and MFA Financial has increased its dividend for 1 consecutive years. Chimera Investment is clearly the better dividend stock, given its higher yield and lower payout ratio.
Summary
Chimera Investment beats MFA Financial on 9 of the 16 factors compared between the two stocks.
About Chimera Investment
Chimera Investment Corporation operates as a real estate investment trust (REIT) in the United States. The company, through its subsidiaries, invests in a portfolio of mortgage assets, including residential mortgage loans, agency residential mortgage-backed securities, non-agency residential mortgage-backed securities, agency mortgage-backed securities secured by pools of commercial mortgage loans, business purpose and investor loans, and other real estate related securities. It invests in investment grade, non-investment grade, and non-rated classes. The company qualifies as a real estate investment trust (REIT) for federal income tax purposes. As a REIT, it intends to distribute at least 90% of its taxable income as dividends to shareholders. Chimera Investment Corporation was incorporated in 2007 and is headquartered in New York, New York.
About MFA Financial
MFA Financial, Inc., together with its subsidiaries, operates as a real estate investment trust in the United States. It invests in residential mortgage securities, including non-agency mortgage-backed securities, agency MBS, and credit risk transfer securities; residential whole loans, including purchased performing loans, purchased credit deteriorated, and non-performing loans; and mortgage servicing rights related assets. The company was incorporated in 1997 and is based in New York, New York.
Receive News & Ratings for Chimera Investment Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for Chimera Investment and related companies with MarketBeat.com's FREE daily email newsletter.
