Critical Contrast: Cherry Hill Mortgage Investment (NYSE:CHMI) and W. P. Carey (NYSE:WPC)

W. P. Carey (NYSE:WPC) and Cherry Hill Mortgage Investment (NYSE:CHMI) are both finance companies, but which is the superior business? We will compare the two companies based on the strength of their dividends, profitability, earnings, analyst recommendations, valuation, institutional ownership and risk.

Dividends

W. P. Carey pays an annual dividend of $3.52 per share and has a dividend yield of 6.5%. Cherry Hill Mortgage Investment pays an annual dividend of $0.60 per share and has a dividend yield of 23.3%. W. P. Carey pays out 138.6% 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 pays out -39.5% of its earnings in the form of a dividend. Cherry Hill Mortgage Investment is clearly the better dividend stock, given its higher yield and lower payout ratio.

Earnings and Valuation

This table compares W. P. Carey and Cherry Hill Mortgage Investment”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
W. P. Carey	$1.59 billion	7.47	$708.33 million	$2.54	21.36
Cherry Hill Mortgage Investment	-$15.04 million	-5.42	-$34.79 million	($1.52)	-1.70

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

Profitability

This table compares W. P. Carey and Cherry Hill Mortgage Investment’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
W. P. Carey	35.12%	6.45%	3.14%
Cherry Hill Mortgage Investment	-60.97%	15.18%	1.45%

Risk & Volatility

W. P. Carey has a beta of 0.96, meaning that its share price is 4% less volatile than the S&P 500. Comparatively, Cherry Hill Mortgage Investment has a beta of 1.39, meaning that its share price is 39% more volatile than the S&P 500.

Insider and Institutional Ownership

73.7% of W. P. Carey shares are held by institutional investors. Comparatively, 18.5% of Cherry Hill Mortgage Investment shares are held by institutional investors. 1.1% of W. P. Carey shares are held by insiders. Comparatively, 1.4% of Cherry Hill Mortgage Investment shares are held by 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.

Analyst Recommendations

This is a breakdown of recent ratings and price targets for W. P. Carey and Cherry Hill Mortgage Investment, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
W. P. Carey	1	6	2	0	2.11
Cherry Hill Mortgage Investment	0	1	1	0	2.50

W. P. Carey presently has a consensus price target of $63.25, suggesting a potential upside of 16.59%. Cherry Hill Mortgage Investment has a consensus price target of $5.00, suggesting a potential upside of 93.80%. Given Cherry Hill Mortgage Investment’s stronger consensus rating and higher probable upside, analysts plainly believe Cherry Hill Mortgage Investment is more favorable than W. P. Carey.

Summary

W. P. Carey beats Cherry Hill Mortgage Investment on 9 of the 16 factors compared between the two stocks.

About W. P. Carey

W. P. Carey ranks among the largest net lease REITs with a well-diversified portfolio of high-quality, operationally critical commercial real estate, which includes 1,424 net lease properties covering approximately 173 million square feet and a portfolio of 89 self-storage operating properties as of December 31, 2023. With offices in New York, London, Amsterdam and Dallas, the company remains focused on investing primarily in single-tenant, industrial, warehouse and retail properties located in the U.S. and Northern and Western Europe, under long-term net leases with built-in rent escalations.

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.