Reviewing Angel Oak Mortgage REIT (NYSE:AOMR) and Chimera Investment (NYSE:CIM)

Angel Oak Mortgage REIT (NYSE:AOMR) and Chimera Investment (NYSE:CIM) are both small-cap finance companies, but which is the superior business? We will contrast the two companies based on the strength of their dividends, profitability, analyst recommendations, risk, valuation, institutional ownership and earnings.

Profitability

This table compares Angel Oak Mortgage REIT and Chimera Investment’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Angel Oak Mortgage REIT	10.64%	5.25%	0.50%
Chimera Investment	2.27%	9.36%	1.55%

Volatility & Risk

Angel Oak Mortgage REIT has a beta of 1.28, meaning that its stock price is 28% more volatile than the S&P 500. Comparatively, Chimera Investment has a beta of 1.68, meaning that its stock price is 68% more volatile than the S&P 500.

Institutional & Insider Ownership

80.2% of Angel Oak Mortgage REIT shares are held by institutional investors. Comparatively, 48.4% of Chimera Investment shares are held by institutional investors. 2.9% of Angel Oak Mortgage REIT shares are held by company insiders. Comparatively, 1.8% of Chimera Investment shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Earnings and Valuation

This table compares Angel Oak Mortgage REIT and Chimera Investment”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Angel Oak Mortgage REIT	$143.65 million	1.42	$44.02 million	$0.64	12.75
Chimera Investment	$821.34 million	1.35	$230.50 million	($0.80)	-16.59

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

Analyst Recommendations

This is a breakdown of recent recommendations for Angel Oak Mortgage REIT and Chimera Investment, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Angel Oak Mortgage REIT	1	2	1	0	2.00
Chimera Investment	1	2	1	0	2.00

Angel Oak Mortgage REIT currently has a consensus price target of $10.13, suggesting a potential upside of 24.10%. Chimera Investment has a consensus price target of $14.83, suggesting a potential upside of 11.74%. Given Angel Oak Mortgage REIT’s higher possible upside, equities research analysts clearly believe Angel Oak Mortgage REIT is more favorable than Chimera Investment.

Dividends

Angel Oak Mortgage REIT pays an annual dividend of $1.28 per share and has a dividend yield of 15.7%. Chimera Investment pays an annual dividend of $1.80 per share and has a dividend yield of 13.6%. Angel Oak Mortgage REIT pays out 200.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Chimera Investment pays out -225.0% of its earnings in the form of a dividend. Chimera Investment has raised its dividend for 1 consecutive years.

Summary

Angel Oak Mortgage REIT beats Chimera Investment on 8 of the 15 factors compared between the two stocks.

About Angel Oak Mortgage REIT

Angel Oak Mortgage REIT, Inc., a real estate finance company, focuses on acquiring and investing in first lien non- qualified mortgage loans and other mortgage-related assets in the United States mortgage market. It offers investment securities; residential mortgage loans; and commercial mortgage loans. 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. The company was incorporated in 2018 and is headquartered in Atlanta, Georgia.

About Chimera Investment

Chimera Investment Corporation operates as a real estate investment trust (REIT) in the United States. The company, through its subsidiaries, invests in a portfolio of mortgage assets, including residential mortgage loans, agency residential mortgage-backed securities, non-agency residential mortgage-backed securities, agency mortgage-backed securities secured by pools of commercial mortgage loans, business purpose and investor loans, and other real estate related securities. It invests in investment grade, non-investment grade, and non-rated classes. The company qualifies as a real estate investment trust (REIT) for federal income tax purposes. As a REIT, it intends to distribute at least 90% of its taxable income as dividends to shareholders. Chimera Investment Corporation was incorporated in 2007 and is headquartered in New York, New York.