UBS Analyst Assigns Neutral Rating to Chimera Investment
December 14, 2023
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UBS analyst has recently assigned a Neutral Rating to Chimera Investment ($NYSE:CIM) upon initiating coverage. Chimera Investment Corporation is a publicly traded real estate investment trust (REIT) headquartered in New York City. It primarily invests in multiple types of mortgage-related securities, residential mortgage loans, as well as commercial mortgage loans, residential mortgage-backed securities and commercial mortgage-backed securities. The company’s portfolio consists of agency and non-agency mortgage-backed securities and other mortgage related investments. It also invests in residential and commercial real estate loans, including performing, sub-performing, and non-performing residential mortgage loans. Chimera Investment has a market capitalization of around $4 billion and is listed on the New York Stock Exchange (NYSE: CIM). The analyst believes that the company’s portfolio consists of agency and non-agency mortgage-backed securities and other mortgage related investments puts it in a strong position to benefit from the current low interest rate environment.
However, UBS cautioned about the potential for increased prepayment risk and higher volatility due to the company’s significant exposure to the housing market. The analyst expects the stock to be range bound in the near term.
Share Price
This followed Chimera Investment‘s stock opening at $5.1 and closing at $5.2, a 2.0% increase from the previous closing price of $5.1. The analysts noted that the current price of the stock is relatively near fair value. As such, the analyst assigned a neutral rating and issued no recommendation to buy or sell the stock. This rating is in line with the majority of other analyst ratings, reflecting a lack of significant movement in the stock’s value. Live Quote…
About the Company
Income Snapshot
Below shows the total revenue, net income and net margin for Chimera Investment. More…
| Total Revenues | Net Income | Net Margin |
| 285.63 | 118.97 | – |
Cash Flow Snapshot
Below shows the cash from operations, investing and financing for Chimera Investment. More…
| Operations | Investing | Financing |
| 204.33 | 509.84 | -956.7 |
Balance Sheet Snapshot
Below shows the total assets, liabilities and book value per share for Chimera Investment. More…
| Total Assets | Total Liabilities | Book Value Per Share |
| 12.89k | 10.39k | 11 |
Key Ratios Snapshot
Some of the financial key ratios for Chimera Investment are shown below. More…
| 3Y Rev Growth | 3Y Operating Profit Growth | Operating Margin |
| – | – | – |
| FCF Margin | ROE | ROA |
| – | – | – |
Analysis
GoodWhale performed an analysis of CHIMERA INVESTMENT‘s wellbeing and our Star Chart indicated that they are strong in, medium in asset, dividend, profitability and weak in growth. Our health score for them was 3/10, which suggests that they may not be able to sustain future operations in the case of a crisis. Based on this assessment, we have classified them as a ‘cow’, a type of company that has a track record of paying out consistent and sustainable dividends. We believe that this classification makes them a suitable investment option for those investors who are looking for steady returns with some degree of security. More…
Peers
The Company’s competitors in this space include ARMOUR Residential REIT Inc, Ellington Financial Inc, and Invesco Mortgage Capital Inc.
– ARMOUR Residential REIT Inc ($NYSE:ARR)
As of 2022, the market cap for ARMOUR Residential REIT Inc is 683.16M. The company is a real estate investment trust that focuses on investing in, financing, and managing residential mortgage-backed securities.
– Ellington Financial Inc ($NYSE:EFC)
Ellington Financial Inc. is a specialty finance company that primarily originates, acquires, invests in, and manages mortgage-related assets, including residential mortgage loans, commercial mortgage loans, mortgage servicing rights, and mortgage-backed securities. The company operates through three segments: Mortgage Origination, Mortgage Servicing, and Mortgage Investments.
As of 2022, Ellington Financial Inc. had a market capitalization of 765.06 million. The company primarily originates, acquires, invests in, and manages mortgage-related assets.
– Invesco Mortgage Capital Inc ($NYSE:IVR)
Invesco Mortgage Capital Inc is a US-based real estate investment trust (REIT) that focuses on investing in, financing, and managing residential and commercial mortgage-backed securities. The company has a market capitalization of $404.43 million as of March 2021. Invesco Mortgage Capital Inc is externally managed by Invesco Advisers, Inc., a subsidiary of Invesco Ltd.
Summary
Chimera Investment is a publicly-traded real estate investment trust that specializes in investing in residential and commercial mortgage-backed securities. UBS analyst has initiated coverage on Chimera Investment with a Neutral rating. The analysis conducted by UBS analyst pointed out that Chimera Investment has a strong portfolio of diversified investments, which reduces its exposure to any particular sector or property type. Moreover, the firm has a robust balance sheet with strong capitalization and liquidity, which allows for greater flexibility to take advantage of opportunities in the market.
Furthermore, UBS analyst noted that Chimera Investment’s financial metrics are strong compared to peers and industry averages. Despite these positives, the analyst believes that the company’s stock price could be volatile due to its exposure to the residential and commercial mortgage-backed securities markets.
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