Comparing Cherry Hill Mortgage Investment (NYSE:CHMI) & NexPoint Residential Trust (NXRT)

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

Volatility and Risk

NexPoint Residential Trust has a beta of 0.59, suggesting that its stock price is 41% less volatile than the S&P 500. Comparatively, Cherry Hill Mortgage Investment has a beta of 0.35, suggesting that its stock price is 65% less volatile than the S&P 500.

Institutional and Insider Ownership

54.6% of NexPoint Residential Trust shares are held by institutional investors. Comparatively, 56.8% of Cherry Hill Mortgage Investment shares are held by institutional investors. 20.0% of NexPoint Residential Trust shares are held by company insiders. Comparatively, 1.1% of Cherry Hill Mortgage Investment shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Earnings and Valuation

This table compares NexPoint Residential Trust and Cherry Hill Mortgage Investment’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
NexPoint Residential Trust $144.24 million 6.15 $53.37 million $1.17 32.27
Cherry Hill Mortgage Investment $42.05 million 7.22 $47.35 million $2.22 8.44

NexPoint Residential 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 NexPoint Residential Trust, indicating that it is currently the more affordable of the two stocks.

Dividends

NexPoint Residential Trust pays an annual dividend of $1.10 per share and has a dividend yield of 2.9%. Cherry Hill Mortgage Investment pays an annual dividend of $1.96 per share and has a dividend yield of 10.5%. NexPoint Residential Trust pays out 94.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Cherry Hill Mortgage Investment pays out 88.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. NexPoint Residential Trust has raised its dividend for 3 consecutive years. Cherry Hill Mortgage Investment is clearly the better dividend stock, given its higher yield and lower payout ratio.

Profitability

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

Net Margins Return on Equity Return on Assets
NexPoint Residential Trust -0.82% -0.49% -0.11%
Cherry Hill Mortgage Investment 175.86% 11.20% 1.55%

Analyst Recommendations

This is a breakdown of current recommendations for NexPoint Residential Trust and Cherry Hill Mortgage Investment, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
NexPoint Residential Trust 0 1 3 0 2.75
Cherry Hill Mortgage Investment 0 0 2 0 3.00

NexPoint Residential Trust presently has a consensus price target of $36.25, suggesting a potential downside of 4.00%. Cherry Hill Mortgage Investment has a consensus price target of $19.50, suggesting a potential upside of 4.06%. Given Cherry Hill Mortgage Investment’s stronger consensus rating and higher probable upside, analysts plainly believe Cherry Hill Mortgage Investment is more favorable than NexPoint Residential Trust.

Summary

Cherry Hill Mortgage Investment beats NexPoint Residential Trust on 10 of the 17 factors compared between the two stocks.

About NexPoint Residential Trust

NexPoint Residential Trust is a publicly traded REIT, with its shares listed on the New York Stock Exchange under the symbol "NXRT," primarily focused on acquiring, owning and operating well-located middle-income multifamily properties with "value-add" potential in large cities and suburban submarkets of large cities, primarily in the Southeastern and Southwestern United States. NXRT is externally advised by NexPoint Real Estate Advisors, L.P., an affiliate of Highland Capital Management, L.P., a leading global alternative asset manager and an SEC-registered investment adviser.

About Cherry Hill Mortgage Investment

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.

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