ARMOUR Residential REIT (NYSE:ARR) and Cherry Hill Mortgage Investment (NYSE:CHMI) Head to Head Review

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

Dividends

ARMOUR Residential REIT pays an annual dividend of $2.88 per share and has a dividend yield of 16.8%. Cherry Hill Mortgage Investment pays an annual dividend of $0.40 per share and has a dividend yield of 16.8%. ARMOUR Residential REIT pays out 150.0% 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 363.6% 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 has raised its dividend for 1 consecutive years. ARMOUR Residential REIT is clearly the better dividend stock, given its higher yield and lower payout ratio.

Insider & Institutional Ownership

54.2% of ARMOUR Residential REIT shares are owned by institutional investors. Comparatively, 18.5% of Cherry Hill Mortgage Investment shares are owned by institutional investors. 0.2% of ARMOUR Residential REIT shares are owned by company insiders. Comparatively, 1.5% of Cherry Hill Mortgage Investment shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Valuation and Earnings

This table compares ARMOUR Residential REIT and Cherry Hill Mortgage Investment”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
ARMOUR Residential REIT	$800.42 million	2.65	$322.69 million	$1.92	8.91
Cherry Hill Mortgage Investment	$61.10 million	1.43	$6.83 million	$0.11	21.68

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

Analyst Ratings

This is a summary of current ratings and price targets for ARMOUR Residential REIT and Cherry Hill Mortgage Investment, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
ARMOUR Residential REIT	1	2	2	0	2.20
Cherry Hill Mortgage Investment	1	1	2	0	2.25

ARMOUR Residential REIT presently has a consensus price target of $18.50, indicating a potential upside of 8.15%. Cherry Hill Mortgage Investment has a consensus price target of $3.00, indicating a potential upside of 25.79%. Given Cherry Hill Mortgage Investment’s stronger consensus rating and higher probable upside, analysts plainly believe Cherry Hill Mortgage Investment is more favorable than ARMOUR Residential REIT.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
ARMOUR Residential REIT	27.43%	15.39%	1.65%
Cherry Hill Mortgage Investment	18.88%	17.95%	1.52%

Risk & Volatility

ARMOUR Residential REIT has a beta of 1.36, suggesting that its stock price is 36% more volatile than the S&P 500. Comparatively, Cherry Hill Mortgage Investment has a beta of 0.93, suggesting that its stock price is 7% less volatile than the S&P 500.

Summary

ARMOUR Residential REIT beats Cherry Hill Mortgage Investment on 10 of the 16 factors compared between the two stocks.

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.

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. It operates through Investments in RMBS (residential mortgage-backed securities) and Investments in Servicing Related Assets segments. Cherry Hill Mortgage Investment Corporation qualifies as a real estate investment trust for federal income tax purposes. The company 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 incorporated in 2012 and is based in Farmingdale, New Jersey.