Financial Analysis: Cherry Hill Mortgage Investment (CHMI) vs. AGNC Investment (AGNC)
Cherry Hill Mortgage Investment (NYSE: CHMI) and AGNC Investment (NASDAQ:AGNC) are both financials companies, but which is the superior investment? We will compare the two businesses based on the strength of their dividends, analyst recommendations, valuation, institutional ownership, earnings, profitability and risk.
Valuation and Earnings
This table compares Cherry Hill Mortgage Investment and AGNC Investment’s top-line revenue, earnings per share (EPS) 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|
|AGNC Investment||$927.00 million||8.26||$623.00 million||$4.05||4.83|
Institutional and Insider Ownership
58.0% of Cherry Hill Mortgage Investment shares are held by institutional investors. Comparatively, 65.5% of AGNC Investment shares are held by institutional investors. 8.9% of Cherry Hill Mortgage Investment shares are held by insiders. Comparatively, 0.5% of AGNC Investment shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.
Risk & Volatility
Cherry Hill Mortgage Investment has a beta of 0.37, indicating that its stock price is 63% less volatile than the S&P 500. Comparatively, AGNC Investment has a beta of 0.13, indicating that its stock price is 87% less volatile than the S&P 500.
This table compares Cherry Hill Mortgage Investment and AGNC Investment’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%|
This is a breakdown of current ratings and price targets for Cherry Hill Mortgage Investment and AGNC Investment, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Cherry Hill Mortgage Investment||0||0||3||0||3.00|
Cherry Hill Mortgage Investment presently has a consensus price target of $19.33, suggesting a potential upside of 10.73%. AGNC Investment has a consensus price target of $19.45, suggesting a potential downside of 0.61%. Given Cherry Hill Mortgage Investment’s stronger consensus rating and higher possible upside, analysts clearly believe Cherry Hill Mortgage Investment is more favorable than AGNC Investment.
Cherry Hill Mortgage Investment pays an annual dividend of $1.96 per share and has a dividend yield of 11.2%. AGNC Investment pays an annual dividend of $2.16 per share and has a dividend yield of 11.0%. Cherry Hill Mortgage Investment pays out 29.1% of its earnings in the form of a dividend. AGNC Investment pays out 53.3% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Cherry Hill Mortgage Investment is clearly the better dividend stock, given its higher yield and lower payout ratio.
Cherry Hill Mortgage Investment beats AGNC Investment on 9 of the 16 factors compared between the two stocks.
Cherry Hill Mortgage Investment 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.
AGNC Investment Company Profile
AGNC Investment Corp., formerly American Capital Agency Corp., is a real estate investment trust. The Company invests in agency residential mortgage-backed securities on a leveraged basis. Its investments consist of residential mortgage pass-through securities and collateralized mortgage obligations (CMOs) for which the principal and interest payments are guaranteed by a government-sponsored enterprise, such as the Federal National Mortgage Association (Fannie Mae) and the Federal Home Loan Mortgage Corporation (Freddie Mac), or by the United States Government agency, such as the Government National Mortgage Association (Ginnie Mae) (collectively, GSEs). Its agency securities include agency residential mortgage-backed securities (Agency RMBS) and to-be-announced forward contracts (TBAs). Its Non-Agency Securities include credit risk transfer securities (CRT), non-agency residential mortgage-backed securities (Non-Agency RMBS) and commercial mortgage-backed securities (CMBS).
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