MFA Finl Inc/SH (NYSE: MFA) and Cherry Hill Mortgage Investment (NYSE:CHMI) are both finance companies, but which is the superior investment? We will compare the two companies based on the strength of their analyst recommendations, profitability, risk, valuation, earnings, institutional ownership and dividends.
Volatility & Risk
MFA Finl Inc/SH has a beta of 0.41, suggesting that its stock price is 59% less volatile than the S&P 500. Comparatively, Cherry Hill Mortgage Investment has a beta of 0.23, suggesting that its stock price is 77% less volatile than the S&P 500.
This table compares MFA Finl Inc/SH and Cherry Hill Mortgage Investment’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|MFA Finl Inc/SH||77.32%||9.82%||2.94%|
|Cherry Hill Mortgage Investment||147.31%||10.42%||1.41%|
MFA Finl Inc/SH pays an annual dividend of $0.80 per share and has a dividend yield of 10.6%. Cherry Hill Mortgage Investment pays an annual dividend of $1.96 per share and has a dividend yield of 10.9%. MFA Finl Inc/SH pays out 101.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Cherry Hill Mortgage Investment pays out 88.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Cherry Hill Mortgage Investment is clearly the better dividend stock, given its higher yield and lower payout ratio.
This is a summary of current ratings and recommmendations for MFA Finl Inc/SH and Cherry Hill Mortgage Investment, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|MFA Finl Inc/SH||0||4||1||0||2.20|
|Cherry Hill Mortgage Investment||0||0||3||0||3.00|
MFA Finl Inc/SH presently has a consensus price target of $8.33, suggesting a potential upside of 10.23%. Cherry Hill Mortgage Investment has a consensus price target of $19.25, suggesting a potential upside of 7.00%. Given MFA Finl Inc/SH’s higher possible upside, equities research analysts clearly believe MFA Finl Inc/SH is more favorable than Cherry Hill Mortgage Investment.
Earnings & Valuation
This table compares MFA Finl Inc/SH and Cherry Hill Mortgage Investment’s revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|MFA Finl Inc/SH||$433.45 million||6.95||$322.39 million||$0.79||9.57|
|Cherry Hill Mortgage Investment||$42.05 million||6.77||$47.35 million||$2.22||8.10|
MFA Finl Inc/SH has higher revenue and earnings than Cherry Hill Mortgage Investment. Cherry Hill Mortgage Investment is trading at a lower price-to-earnings ratio than MFA Finl Inc/SH, indicating that it is currently the more affordable of the two stocks.
Institutional and Insider Ownership
79.0% of MFA Finl Inc/SH shares are owned by institutional investors. Comparatively, 41.2% of Cherry Hill Mortgage Investment shares are owned by institutional investors. 0.7% of MFA Finl Inc/SH shares are owned by insiders. Comparatively, 1.1% of Cherry Hill Mortgage Investment shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.
About MFA Finl Inc/SH
MFA Financial, Inc., through its subsidiaries, operates as a real estate investment trust (REIT) in the United States. The company invests in residential mortgage assets, including non-agency mortgage-backed securities (MBS), agency MBS, residential whole loans, credit risk transfer securities, and mortgage servicing rights related assets. Its MBS are secured by hybrid, adjustable-rate, 15-year fixed-rate, and 30-year and longer-term fixed-rate mortgages, as well as mortgages that have interest rates that reset more frequently. The company has elected to be taxed as a REIT and would not be subject to federal corporate income taxes if it distributes at least 90% of its taxable income to its stockholders. MFA Financial, Inc. was founded in 1997 and is headquartered in New York, New York.
About Cherry Hill Mortgage Investment
Cherry Hill Mortgage Investment Corporation, a residential real estate finance company, acquires, invests in, and manages residential mortgage assets in the United States. The company operates through Investments in RMBS and Investments in Servicing Related Assets segments. It manages a portfolio of servicing related assets, residential mortgage-backed securities (RMBS), and prime residential mortgage loans, as well as other residential mortgage assets. The company qualifies as a real estate investment trust for federal income tax purposes. It generally would not be subject to federal corporate income taxes if it distributes at least 90% of its taxable income to its stockholders. Cherry Hill Mortgage Investment Corporation was founded in 2012 and is based in Farmingdale, New Jersey.
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