Comparing CHIMERA INVT CO/SH NEW (NYSE:CIM) & DIGITAL RLTY TR/SH (NYSE:DLR)

CHIMERA INVT CO/SH NEW (NYSE:CIM) and DIGITAL RLTY TR/SH (NYSE:DLR) are both finance companies, but which is the better business? We will contrast the two businesses based on the strength of their risk, valuation, analyst recommendations, dividends, institutional ownership, profitability and earnings.

Profitability

This table compares CHIMERA INVT CO/SH NEW and DIGITAL RLTY TR/SH’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
CHIMERA INVT CO/SH NEW 21.84% 12.59% 1.82%
DIGITAL RLTY TR/SH 10.95% 3.27% 1.39%

Volatility and Risk

CHIMERA INVT CO/SH NEW has a beta of 0.6, indicating that its share price is 40% less volatile than the S&P 500. Comparatively, DIGITAL RLTY TR/SH has a beta of 0.4, indicating that its share price is 60% less volatile than the S&P 500.

Earnings and Valuation

This table compares CHIMERA INVT CO/SH NEW and DIGITAL RLTY TR/SH’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
CHIMERA INVT CO/SH NEW $1.27 billion 2.81 $411.64 million $2.34 8.18
DIGITAL RLTY TR/SH $3.05 billion 8.22 $331.25 million $6.60 18.22

CHIMERA INVT CO/SH NEW has higher earnings, but lower revenue than DIGITAL RLTY TR/SH. CHIMERA INVT CO/SH NEW is trading at a lower price-to-earnings ratio than DIGITAL RLTY TR/SH, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a breakdown of current recommendations for CHIMERA INVT CO/SH NEW and DIGITAL RLTY TR/SH, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
CHIMERA INVT CO/SH NEW 0 2 1 0 2.33
DIGITAL RLTY TR/SH 0 4 8 0 2.67

CHIMERA INVT CO/SH NEW presently has a consensus target price of $19.25, suggesting a potential upside of 0.57%. DIGITAL RLTY TR/SH has a consensus target price of $126.73, suggesting a potential upside of 5.37%. Given DIGITAL RLTY TR/SH’s stronger consensus rating and higher possible upside, analysts clearly believe DIGITAL RLTY TR/SH is more favorable than CHIMERA INVT CO/SH NEW.

Institutional & Insider Ownership

51.9% of CHIMERA INVT CO/SH NEW shares are held by institutional investors. Comparatively, 99.2% of DIGITAL RLTY TR/SH shares are held by institutional investors. 0.8% of CHIMERA INVT CO/SH NEW shares are held by company insiders. Comparatively, 0.5% of DIGITAL RLTY TR/SH shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Dividends

CHIMERA INVT CO/SH NEW pays an annual dividend of $2.00 per share and has a dividend yield of 10.4%. DIGITAL RLTY TR/SH pays an annual dividend of $4.32 per share and has a dividend yield of 3.6%. CHIMERA INVT CO/SH NEW pays out 85.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. DIGITAL RLTY TR/SH pays out 65.5% of its earnings in the form of a dividend. CHIMERA INVT CO/SH NEW has increased its dividend for 4 consecutive years and DIGITAL RLTY TR/SH has increased its dividend for 14 consecutive years.

Summary

DIGITAL RLTY TR/SH beats CHIMERA INVT CO/SH NEW on 10 of the 17 factors compared between the two stocks.

About CHIMERA INVT CO/SH NEW

Chimera Investment Corporation operates as a real estate investment trust in the United States. The company, through its subsidiaries, invests in a portfolio of mortgage assets, including residential mortgage loans, agency and non-agency residential mortgage-backed securities, agency mortgage-backed securities secured by pools of commercial mortgage loans, commercial mortgage loans, and other real estate related securities. It has elected to be taxed as a real estate investment trust. As a result, the company would not be subject to U.S. federal income tax, if it distributes at least 90% of its REIT taxable income to its shareholders. Chimera Investment Corporation was founded in 2007 and is headquartered in New York, New York.

About DIGITAL RLTY TR/SH

Digital Realty supports the data center, colocation and interconnection strategies of more than 2,300 firms across its secure, network-rich portfolio of data centers located throughout North America, Europe, Asia and Australia. Digital Realty's clients include domestic and international companies of all sizes, ranging from cloud and information technology services, communications and social networking to financial services, manufacturing, energy, healthcare, and consumer products.

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