NYSE:CHMI

Stock Analysis Report

Cherry Hill Mortgage Investment

Executive Summary

Cherry Hill Mortgage Investment Corporation, a residential real estate finance company, acquires, invests in, and manages residential mortgage assets in the United States.

Rewards

Trading at 73.4% below its fair value

Earnings are forecast to grow 98.71% per year

Risk Analysis

Makes less than USD$1m in revenue ($-81M)

Dividend of 9.98% is not well covered by earnings

Shareholders have been diluted in the past year



Snowflake Analysis

High growth potential and fair value.


Similar Companies

Share Price & News

How has Cherry Hill Mortgage Investment's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: CHMI has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

1.5%

CHMI

1.9%

US Mortgage REITs

0.06%

US Market


1 Year Return

-13.7%

CHMI

7.9%

US Mortgage REITs

19.4%

US Market

Return vs Industry: CHMI underperformed the US Mortgage REITs industry which returned 7.2% over the past year.

Return vs Market: CHMI underperformed the US Market which returned 20.1% over the past year.


Shareholder returns

CHMIIndustryMarket
7 Day1.5%1.9%0.06%
30 Day9.3%4.4%1.1%
90 Day10.8%10.0%8.9%
1 Year-3.2%-13.7%19.7%7.9%21.9%19.4%
3 Year22.4%-12.8%45.9%5.5%48.9%39.3%
5 Year64.5%-9.0%75.0%0.6%71.9%53.1%

Price Volatility Vs. Market

How volatile is Cherry Hill Mortgage Investment's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Cherry Hill Mortgage Investment undervalued compared to its fair value and its price relative to the market?

>50%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: CHMI ($16.04) is trading below our estimate of fair value ($60.26)

Significantly Below Fair Value: CHMI is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: CHMI is unprofitable, so we can't compare its PE Ratio to the Mortgage REITs industry average.

PE vs Market: CHMI is unprofitable, so we can't compare its PE Ratio to the US market.


Price to Earnings Growth Ratio

PEG Ratio: Insufficient data to calculate CHMI's PEG Ratio to determine if it is good value.


Price to Book Ratio

PB vs Industry: CHMI is good value based on its PB Ratio (0.9x) compared to the US Mortgage REITs industry average (1x).


Next Steps

Future Growth

How is Cherry Hill Mortgage Investment forecast to perform in the next 1 to 3 years based on estimates from 4 analysts?

98.7%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: CHMI is forecast to become profitable over the next 3 years, which is considered faster growth than the savings rate (1.7%).

Earnings vs Market: CHMI is forecast to become profitable over the next 3 years, which is considered above average market growth.

High Growth Earnings: CHMI's is expected to become profitable in the next 3 years.

Revenue vs Market: CHMI's revenue (41.4% per year) is forecast to grow faster than the US market (7.6% per year).

High Growth Revenue: CHMI's revenue (41.4% per year) is forecast to grow faster than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: Insufficient data to determine if CHMI's Return on Equity is forecast to be high in 3 years time


Next Steps

Past Performance

How has Cherry Hill Mortgage Investment performed over the past 5 years?

-8.8%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: CHMI is currently unprofitable.

Growing Profit Margin: CHMI is currently unprofitable.


Past Earnings Growth Analysis

Earnings Trend: CHMI is unprofitable, and losses have increased over the past 5 years at a rate of -8.8% per year.

Accelerating Growth: Unable to compare CHMI's earnings growth over the past year to its 5-year average as it is currently unprofitable

Earnings vs Industry: CHMI is unprofitable, making it difficult to compare its past year earnings growth to the Mortgage REITs industry (7.3%).


Return on Equity

High ROE: CHMI has a negative Return on Equity (-21.99%), as it is currently unprofitable.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Cherry Hill Mortgage Investment's financial position? (This company is analysed differently as a bank or financial institution)


Financial Position Analysis


Debt to Equity History and Analysis


Balance Sheet

Inventory Level: CHMI has a low level of unsold assets or inventory.

Debt Coverage by Assets: CHMI's debt is not covered by short term assets (assets are 0.1x debt).


Cash Runway Analysis

For companies that have on average been loss making in the past we assess whether they have at least 1 year of cash runway.

Stable Cash Runway: CHMI has been profitable on average in the past, therefore cash runway is not a concern.

Forecast Cash Runway: CHMI has been profitable on average in the past, therefore cash runway is not a concern.


Financial Institutions Analysis

Asset Level: CHMI's level of assets compared to its equity is low.

Allowance for Bad Loans: Insufficient data to determine if CHMI has a sufficient allowance for bad loans.

Low Risk Liabilities: CHMI reports no customer deposits, loans are made up entirely of externally borrowed funds.

Loan Level: Insufficient data to determine if CHMI has an acceptable proportion of non-loan assets held.

Low Risk Deposits: CHMI has advanced significantly more loans than the customer deposits it holds.

Level of Bad Loans: Insufficient data to determine if CHMI has an appropriate level of bad loans.


Next Steps

Dividend

What is Cherry Hill Mortgage Investment's current dividend yield, its reliability and sustainability?

9.98%

Current Dividend Yield


Dividend Yield vs Market

company10.0%marketbottom25%1.4%markettop25%3.7%industryaverage9.2%forecastin3Years10.1%

Current dividend yield vs market & industry

Notable Dividend: CHMI's dividend (9.98%) is higher than the bottom 25% of dividend payers in the US market (1.44%).

High Dividend: CHMI's dividend (9.98%) is in the top 25% of dividend payers in the US market (3.69%)


Stability and Growth of Payments

Stable Dividend: CHMI has been paying a dividend for less than 10 years and during this time payments have been volatile.

Growing Dividend: CHMI has only been paying a dividend for 6 years, and since then payments have fallen.


Current Payout to Shareholders

Dividend Coverage: CHMI is paying a dividend but the company is unprofitable.


Future Payout to Shareholders

Future Dividend Coverage: CHMI's dividends in 3 years are forecast to be covered by earnings (87.4% payout ratio).


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

2.9yrs

Average management tenure


CEO

Jay Lown (55yo)

2.9yrs

Tenure

US$154,445

Compensation

Mr. Jeffrey B. Lown II, also known as Jay, has been the President of Cherry Hill Mortgage Investment Corporation since October 2012 and has been its Chief Executive Officer since March 23, 2017 and served  ...


Leadership Team

NamePositionTenureCompensationOwnership
Jeffrey Lown
President2.9yrsUS$154.45k0.065% $177.6k
Julian Evans
Chief Investment Officer3.9yrsUS$95.39k0.025% $69.3k
Michael Hutchby
CFO, Treasurer0.7yrsno datano data

2.9yrs

Average Tenure

49yo

Average Age

Experienced Management: CHMI's management team is considered experienced (2.9 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Jeffrey Lown
President2.9yrsUS$154.45k0.065% $177.6k
Joseph Murin
Lead Independent Director5.9yrsUS$112.50k0.12% $330.0k
Robert Mercer
Independent Director2.9yrsUS$105.00k0.058% $158.9k
Regina Lowrie
Independent Director4.7yrsUS$102.50k0.089% $244.1k

5.3yrs

Average Tenure

67yo

Average Age

Experienced Board: CHMI's board of directors are considered experienced (5.3 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 21.5%.


Top Shareholders

Company Information

Cherry Hill Mortgage Investment Corporation's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Cherry Hill Mortgage Investment Corporation
  • Ticker: CHMI
  • Exchange: NYSE
  • Founded: 2012
  • Industry: Mortgage REITs
  • Sector: Diversified Financials
  • Implied Market Cap: US$275.359m
  • Market Cap: US$271.022m
  • Shares outstanding: 17.17m
  • Website: https://www.chmireit.com

Number of Employees


Location

  • Cherry Hill Mortgage Investment Corporation
  • 1451 Route 34
  • Suite 303
  • Farmingdale
  • New Jersey
  • 7727
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
CHMINYSE (New York Stock Exchange)YesCommon StockUSUSDOct 2013
CHMI.PRANYSE (New York Stock Exchange)8.20% CUM PFD AUSUSDAug 2017
CHMI.PRBNYSE (New York Stock Exchange)8.250 CUM PFD BUSUSDFeb 2019

Biography

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. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/02/18 00:51
End of Day Share Price2020/02/14 00:00
Earnings2019/09/30
Annual Earnings2018/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.