Dividend stocks are gaining momentum after major technology companies announced their first dividends of the year. Amid the current inflation storm and long-term inflation expectations, Americans are starting to favor dividend stocks. In this environment, stocks with high dividends and affordable prices are in the spotlight.
We recently covered some of the best high-yield penny dividend stocks for hedge funds to buy. Chimera Investment Corporation (NYSE: CIM) is a prominent company in the REIT industry and deserves special attention.
Chimera Investment Corporation (NYSE:CIM)
Number of hedge fund investors: 18
Chimera Investment Corporation (NYSE:CIM) has a dividend yield of approximately 10% as of May 14th. The stock has been in the news after the New York-based company’s board announced a reverse stock split in his 1-share ratio. -for-3, the market effectively ended on May 21st.
In its latest financial results conference earlier this month, Chimera spoke about dividends and financial conditions:
“Our economic return on GAAP book value for the first quarter was 7% based on the quarterly change in book value and the first quarter dividend per common share. Net income was $31 million, with economic net interest income of $68 million and average interest return for the first quarter of 5.8%.
The average cost of funds was 4.4% and the net interest spread was 1.4%. Total leverage in the first quarter was 3.7:1, while recourse leverage ended the quarter at 0.9:1. In terms of funding and liquidity, the company ended the quarter with $587 million in cash and unencumbered assets. To hedge, the Company exercised two swap contracts with a nominal value of $1 billion in the first quarter and entered into two separate one-year swaps with a weighted average fixed rate of 3.46% with a total nominal value of $1 billion. The Company has added a new swaption contract with a nominal value of $500 million as a 3.45% fixed rate option for one year beginning in January 2025. The Company had variable interest rate exposure of $1.7 billion on outstanding repurchase obligations. The Company held $2.0 billion of fixed rate swaps with a weighted average fixed rate of 3.36% as a hedge position for variable rate debt. ”
Image by Steve Buissinne from Pixabay
As of May 14, Chimera stock was trading at about $4.48, compared to Wall Street analysts’ 12-month forecast price of $5.25. This indicates that the stock price could rise by 17%. However, unlike Johnson & Johnson (NYSE:JNJ), Procter & Gamble (NYSE:PG), and Exxon Mobil Corporation (NYSE:XOM), Chimera Investment Corporation (NYSE:CIM) is a hedge It is a small company with little funds. Emotions.
Is Chimera Investment Corporation really the best high dividend penny stock? According to Insider Monkey research, there are 10 high dividend penny stocks that are better than Chimera. Click to see the 10 best high dividend penny stocks that Hegdefund prefers over Chimera. Disclosure: None.
