Head to Head Comparison: ARMOUR Residential REIT (NYSE:ARR) vs. Chimera Investment (NYSE:CIM)

Chimera Investment (NYSE:CIM) and ARMOUR Residential REIT (NYSE:ARR) are both finance companies, but which is the superior business? We will contrast the two businesses based on the strength of their risk, dividends, earnings, valuation, institutional ownership, profitability and analyst recommendations.

Risk and Volatility

Chimera Investment has a beta of 1.83, suggesting that its share price is 83% more volatile than the S&P 500. Comparatively, ARMOUR Residential REIT has a beta of 1.44, suggesting that its share price is 44% more volatile than the S&P 500.

Profitability

This table compares Chimera Investment and ARMOUR Residential REIT’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Chimera Investment	4.27%	7.36%	1.36%
ARMOUR Residential REIT	9.01%	15.37%	1.63%

Valuation & Earnings

This table compares Chimera Investment and ARMOUR Residential REIT”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Chimera Investment	$177.35 million	6.12	$176.07 million	($0.40)	-32.64
ARMOUR Residential REIT	$550.95 million	3.68	-$14.39 million	$0.04	452.38

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

Analyst Ratings

This is a breakdown of recent recommendations and price targets for Chimera Investment and ARMOUR Residential REIT, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Chimera Investment	1	3	1	0	2.00
ARMOUR Residential REIT	2	4	2	0	2.00

Chimera Investment presently has a consensus price target of $14.50, indicating a potential upside of 11.07%. ARMOUR Residential REIT has a consensus price target of $17.25, indicating a potential downside of 4.67%. Given Chimera Investment’s higher probable upside, equities analysts plainly believe Chimera Investment is more favorable than ARMOUR Residential REIT.

Institutional and Insider Ownership

48.4% of Chimera Investment shares are held by institutional investors. Comparatively, 54.2% of ARMOUR Residential REIT shares are held by institutional investors. 1.5% of Chimera Investment shares are held by insiders. Comparatively, 0.2% of ARMOUR Residential REIT shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Dividends

Chimera Investment pays an annual dividend of $1.48 per share and has a dividend yield of 11.3%. ARMOUR Residential REIT pays an annual dividend of $2.88 per share and has a dividend yield of 15.9%. Chimera Investment pays out -370.0% of its earnings in the form of a dividend. ARMOUR Residential REIT pays out 7,200.0% 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 has raised its dividend for 1 consecutive years.

Summary

ARMOUR Residential REIT beats Chimera Investment on 9 of the 16 factors compared between the two stocks.

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.

About ARMOUR Residential REIT

ARMOUR Residential REIT, Inc. invests in residential mortgage-backed securities (MBS) in the United States. Its securities portfolio primarily consists of the United States Government-sponsored entity's (GSE) and the Government National Mortgage Administration's issued or guaranteed securities backed by fixed rate, hybrid adjustable rate, and adjustable-rate home loans; and unsecured notes and bonds issued by the GSE and the United States treasuries, as well as money market instruments. The company has elected to be taxed as a real estate investment trust. As a result, it would not be subject to corporate income tax on that portion of its net income that is distributed to shareholders. ARMOUR Residential REIT, Inc. was incorporated in 2008 and is based in Vero Beach, Florida.