PennyMac Mortgage Investment Trust (NYSE: PMT) and Cherry Hill Mortgage Investment (NYSE:CHMI) are both small-cap finance companies, but which is the superior investment? We will contrast the two companies based on the strength of their analyst recommendations, institutional ownership, valuation, earnings, risk, profitability and dividends.

Dividends

PennyMac Mortgage Investment Trust pays an annual dividend of $1.88 per share and has a dividend yield of 11.8%. Cherry Hill Mortgage Investment pays an annual dividend of $1.96 per share and has a dividend yield of 11.3%. PennyMac Mortgage Investment Trust pays out 132.4% 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 29.0% of its earnings in the form of a dividend.

Risk and Volatility

PennyMac Mortgage Investment Trust has a beta of 0.52, suggesting that its stock price is 48% less volatile than the S&P 500. Comparatively, Cherry Hill Mortgage Investment has a beta of 0.37, suggesting that its stock price is 63% less volatile than the S&P 500.

Analyst Recommendations

This is a summary of current recommendations for PennyMac Mortgage Investment Trust and Cherry Hill Mortgage Investment, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
PennyMac Mortgage Investment Trust 0 2 1 0 2.33
Cherry Hill Mortgage Investment 0 0 3 0 3.00

PennyMac Mortgage Investment Trust currently has a consensus price target of $18.50, indicating a potential upside of 16.50%. Cherry Hill Mortgage Investment has a consensus price target of $19.33, indicating a potential upside of 11.69%. Given PennyMac Mortgage Investment Trust’s higher possible upside, analysts plainly believe PennyMac Mortgage Investment Trust is more favorable than Cherry Hill Mortgage Investment.

Valuation & Earnings

This table compares PennyMac Mortgage Investment Trust and Cherry Hill Mortgage Investment’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
PennyMac Mortgage Investment Trust $272.09 million 3.83 $75.81 million $1.42 11.18
Cherry Hill Mortgage Investment $30.72 million 7.17 $24.83 million $6.75 2.56

PennyMac Mortgage Investment Trust has higher revenue and earnings than Cherry Hill Mortgage Investment. Cherry Hill Mortgage Investment is trading at a lower price-to-earnings ratio than PennyMac Mortgage Investment Trust, indicating that it is currently the more affordable of the two stocks.

Institutional and Insider Ownership

63.0% of PennyMac Mortgage Investment Trust shares are held by institutional investors. Comparatively, 58.0% of Cherry Hill Mortgage Investment shares are held by institutional investors. 2.1% of PennyMac Mortgage Investment Trust 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 endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Profitability

This table compares PennyMac Mortgage Investment Trust and Cherry Hill Mortgage Investment’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
PennyMac Mortgage Investment Trust 36.07% 7.59% 1.75%
Cherry Hill Mortgage Investment 136.70% 9.49% 1.58%

PennyMac Mortgage Investment Trust Company Profile

PennyMac Mortgage Investment Trust is a specialty finance company that invests primarily in residential mortgage loans and mortgage-related assets. The Company conducts all of its operations, and makes all of its investments, through PennyMac Operating Partnership, L.P. (its Operating Partnership) and its subsidiaries. It operates through two segments: correspondent production and investment activities. Its investment activities segment represents the Company’s investments in mortgage-related assets. The correspondent production segment represents the Company’s operations aimed at serving as an intermediary between mortgage lenders and the capital markets by purchasing, pooling and reselling newly originated prime credit quality mortgage loans either directly or in the form of MBS, using the services of PNMAC Capital Management (the Manager or PCM) and PennyMac Loan Services, LLC (PLS), both indirect subsidiaries of PennyMac Financial Services, Inc. (PFSI or PennyMac).

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.

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