New Residential Investment (NYSE: NRZ) and Cherry Hill Mortgage Investment (NYSE:CHMI) are both financials companies, but which is the superior stock? We will compare the two businesses based on the strength of their dividends, risk, valuation, earnings, analyst recommendations, institutional ownership and profitability.
New Residential Investment pays an annual dividend of $2.00 per share and has a dividend yield of 11.3%. Cherry Hill Mortgage Investment pays an annual dividend of $1.96 per share and has a dividend yield of 11.1%. New Residential Investment pays out 64.7% of its earnings in the form of a dividend. Cherry Hill Mortgage Investment pays out 29.1% 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 has increased its dividend for 4 consecutive years.
Valuation & Earnings
This table compares New Residential Investment and Cherry Hill Mortgage Investment’s revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|New Residential Investment||$1.08 billion||5.06||$504.45 million||$3.09||5.74|
|Cherry Hill Mortgage Investment||$30.72 million||7.30||$24.83 million||$6.73||2.62|
New Residential Investment has higher revenue and earnings than Cherry Hill Mortgage Investment. Cherry Hill Mortgage Investment is trading at a lower price-to-earnings ratio than New Residential Investment, indicating that it is currently the more affordable of the two stocks.
Institutional and Insider Ownership
48.5% of New Residential Investment shares are held by institutional investors. Comparatively, 58.0% of Cherry Hill Mortgage Investment shares are held by institutional investors. 0.5% of New Residential Investment shares are held by company insiders. Comparatively, 8.9% of Cherry Hill Mortgage Investment shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.
Volatility and Risk
New Residential Investment has a beta of 1.02, suggesting that its share price is 2% more volatile than the S&P 500. Comparatively, Cherry Hill Mortgage Investment has a beta of 0.37, suggesting that its share price is 63% less volatile than the S&P 500.
This is a breakdown of current ratings and recommmendations for New Residential Investment and Cherry Hill Mortgage Investment, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|New Residential Investment||0||1||6||0||2.86|
|Cherry Hill Mortgage Investment||0||0||3||0||3.00|
New Residential Investment presently has a consensus target price of $18.33, indicating a potential upside of 3.34%. Cherry Hill Mortgage Investment has a consensus target price of $19.33, indicating a potential upside of 9.72%. Given Cherry Hill Mortgage Investment’s stronger consensus rating and higher probable upside, analysts plainly believe Cherry Hill Mortgage Investment is more favorable than New Residential Investment.
This table compares New Residential Investment and Cherry Hill Mortgage Investment’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|New Residential Investment||60.06%||19.38%||3.99%|
|Cherry Hill Mortgage Investment||136.70%||9.49%||1.58%|
Cherry Hill Mortgage Investment beats New Residential Investment on 9 of the 17 factors compared between the two stocks.
About New Residential Investment
New Residential Investment Corp. is a real estate investment trust (REIT). The Company focuses on investing in, and managing, investments related to residential real estate. The Company’s segments include investments in excess mortgage servicing rights (Excess MSRs); investments in mortgage servicing rights (MSRs); investments in servicer advances; investments in real estate securities; investments in residential mortgage loans; investments in consumer loans, and corporate. Its portfolio includes mortgage servicing related assets, residential mortgage backed securities (RMBS), residential mortgage loans and other investments. The Company’s servicing related assets include its investments in Excess MSRs, MSRs and servicer advances. The Company invests in agency RMBS and non-agency RMBS. The Company’s other investments consist of consumer loans.
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.
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