Reviewing Granite Point Mortgage Trust (GPMT) & Chimera Investment (CIM)

Granite Point Mortgage Trust (NYSE: GPMT) and Chimera Investment (NYSE:CIM) are both financials companies, but which is the better investment? We will contrast the two companies based on the strength of their analyst recommendations, risk, institutional ownership, dividends, profitability, earnings and valuation.

Valuation & Earnings

This table compares Granite Point Mortgage Trust and Chimera Investment’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Granite Point Mortgage Trust N/A N/A N/A $1.18 14.51
Chimera Investment $934.07 million 3.43 $551.94 million $3.25 5.26

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

Profitability

This table compares Granite Point Mortgage Trust and Chimera Investment’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Granite Point Mortgage Trust N/A N/A N/A
Chimera Investment 58.21% 13.29% 2.33%

Analyst Ratings

This is a summary of recent ratings and target prices for Granite Point Mortgage Trust and Chimera Investment, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Granite Point Mortgage Trust 0 1 4 0 2.80
Chimera Investment 0 3 2 0 2.40

Granite Point Mortgage Trust presently has a consensus price target of $19.50, indicating a potential upside of 13.90%. Chimera Investment has a consensus price target of $18.88, indicating a potential upside of 10.51%. Given Granite Point Mortgage Trust’s stronger consensus rating and higher probable upside, equities analysts clearly believe Granite Point Mortgage Trust is more favorable than Chimera Investment.

Dividends

Granite Point Mortgage Trust pays an annual dividend of $0.70 per share and has a dividend yield of 4.1%. Chimera Investment pays an annual dividend of $2.00 per share and has a dividend yield of 11.7%. Granite Point Mortgage Trust pays out 59.3% of its earnings in the form of a dividend. Chimera Investment pays out 61.5% 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. Chimera Investment has raised its dividend for 3 consecutive years. Chimera Investment is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Institutional and Insider Ownership

14.4% of Granite Point Mortgage Trust shares are owned by institutional investors. Comparatively, 50.3% of Chimera Investment shares are owned by institutional investors. 0.7% of Chimera Investment shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Summary

Chimera Investment beats Granite Point Mortgage Trust on 9 of the 14 factors compared between the two stocks.

Granite Point Mortgage Trust Company Profile

Granite Point Mortgage Trust Inc. is focused primarily on directly originating, investing in and managing senior floating-rate commercial mortgage loans and other debt, such as commercial real estate investments. The Company formed to continue and expand the commercial real estate lending business. The Company is a long-term, fundamental value-oriented investor. The Company constructs its own investment portfolio on a loan-by-loan basis, emphasizing rigorous credit underwriting, selectivity and diversification available in the market. The Company provides intermediate-term bridge or transitional financing for a variety of purposes, including acquisitions, recapitalizations, refinancing and a range of business plans including lease-up, renovation, repositioning and repurposing of the property. It generally targets the top 25-50, metropolitan statistical areas (MSA) in the United States.

Chimera Investment Company Profile

Chimera Investment Corporation is a real estate investment trust (REIT). The company is engaged in the business of investing in a portfolio of mortgage assets, including agency residential mortgage-backed security (RMBS), non-agency RMBS, agency commercial mortgage-backed securities (CMBS), residential mortgage loans and real estate related securities. The Company’s objective is to provide risk-adjusted returns to its investors over the long-term, primarily through dividends and secondarily through capital appreciation. The Company focuses to achieve this objective by investing in an investment portfolio of RMBS, agency CMBS, residential mortgage loans, commercial mortgage loans, real estate-related securities and various other asset classes. The MBS and real estate-related securities the Company purchases include investment-grade and non-investment grade classes, including the BB-rated, B-rated and non-rated classes. It also invests in investment grade and non-investment grade RMBS.

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