Evaluation of Chimera Investment Corporation’s dividend sustainability
Chimera Investment Corp. (NYSE:CIM) recently announced a dividend of $0.11 per share, payable on April 30, 2024, with an ex-dividend date of April 5, 2024. The company’s dividend history, yield, and growth rate are also in focus as investors look forward to future payouts. Let’s examine Chimera Investment Corp’s dividend history and assess its sustainability using data from GuruFocus.
What does Chimera Investment Corporation do?
Chimera Investment Corporation is a real estate investment trust that invests in a portfolio of mortgage assets with leverage. These investments include various government-backed agency mortgage-backed securities (RMBS), non-government agency his RMBS, government agency commercial mortgage-backed securities, residential mortgages, and other real estate-related securities. will appear. Agency mortgage-backed securities account for the largest share of this portfolio, with subprime mortgages and non-agency RMBS also accounting for significant shares.
A glimpse at Chimera Investment Corp’s dividend history
Chimera Investment Corp has maintained a consistent dividend payment record since 2007. Dividends are currently distributed on a quarterly basis. Below is a graph showing annual dividends per share to track historical trends.
Analyzing Chimera Investment Corporation’s dividend yield and growth rate
As of today, Chimera Investment Corp’s 12-month forward dividend yield is 15.75% and the 12-month forward dividend yield is 9.89%. This suggests that we can expect dividend payments to decline over the next 12 months.
Over the past 3 years, Chimera Investment Corporation’s annual dividend growth rate was -20.60%. When extended to a five-year period, this rate increased to -18.30% per year. Also, Chimera Investment Corporation’s annual dividend growth rate per share over the past 10 years was -7.40%.
Based on Chimera Investment Corp’s dividend yield and 5-year growth rate, as of today, Chimera Investment Corp stock has a 5-year cost yield of approximately 5.73%.
Questions about sustainability: Dividend payout ratio and profitability
To assess dividend sustainability, you need to evaluate a company’s payout ratio. Dividend payout ratio helps determine the proportion of a company’s profits that it distributes as dividends. A low ratio indicates that the company is retaining a significant portion of its earnings, thereby ensuring that it has funds for future growth or unexpected economic downturns. As of December 31, 2023, Chimera Investment Corporation’s dividend payout ratio was 1.55, which may suggest that the company’s dividend may not be sustainable.
Chimera Investment Corp’s Profitability Rank helps you understand the company’s profitability compared to its peers. GuruFocus ranks Chimera Investment Corp’s profitability at 3 out of 10 as of December 31, 2023, suggesting the dividend may not be sustainable. The company has posted a net profit in nine of the past 10 years.
Growth indicators: future outlook
To ensure dividend sustainability, companies must have solid growth metrics. Chimera Investment Corp’s growth rank of 3 out of 10 suggests that the company’s growth prospects are poor and its dividend may be unsustainable.
Earnings are the lifeblood of any company, and Chimera Investment Corp’s earnings per share combined with its 3-year earnings growth rate suggest a strong earnings model. Chimera Investment Corp’s revenue has grown at an average annual rate of around -4.20%, which is lower than around 80.45% of its global competitors.
The company’s three-year EPS growth rate indicates its ability to grow earnings, which is a key factor in maintaining a dividend over the long term. Over the past three years, Chimera Investment Corp’s earnings have grown by an average of -47.40% per year. This is a percentage lower than approximately 93.99% of its global competitors.
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In conclusion, Chimera Investment Corp has historically been a consistent dividend payer, but the current data suggests caution. Declining dividend growth rates, high payout ratios, and poor profitability and growth ranks raise questions about the future sustainability of the dividend. Investors should carefully monitor Chimera Investment Corp.’s financial health and industry trends when considering it as a potential income investment. GuruFocus Premium users can screen for high dividend yield stocks using the High Dividend Yield Screener.
This article created by GuruFocus is intended to provide general insight and is not intended as financial advice. Our commentary is based on historical data and analyst forecasts using an unbiased methodology and is not intended to serve as specific investment guidance. It does not constitute a recommendation to buy or sell stocks, and does not take into account your individual investment objectives or financial situation. Our objective is to provide fundamental data-driven analysis over time. Please note that our analysis may not incorporate the latest announcements or qualitative information from price-sensitive companies. GuruFocus has no position in the stocks mentioned herein.
This article first appeared on GuruFocus.
