Reviewing Chimera Investment (NYSE:CIM) & Omega Healthcare Investors (NYSE:OHI)

Chimera Investment (NYSE:CIM) and Omega Healthcare Investors (NYSE:OHI) are both finance companies, but which is the superior stock? We will contrast the two companies based on the strength of their profitability, analyst recommendations, earnings, dividends, risk, institutional ownership and valuation.

Volatility and Risk

Chimera Investment has a beta of 1.72, indicating that its stock price is 72% more volatile than the S&P 500. Comparatively, Omega Healthcare Investors has a beta of 0.97, indicating that its stock price is 3% less volatile than the S&P 500.

Institutional & Insider Ownership

48.4% of Chimera Investment shares are owned by institutional investors. Comparatively, 65.3% of Omega Healthcare Investors shares are owned by institutional investors. 0.9% of Chimera Investment shares are owned by insiders. Comparatively, 1.4% of Omega Healthcare Investors shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Dividends

Chimera Investment pays an annual dividend of $1.40 per share and has a dividend yield of 9.4%. Omega Healthcare Investors pays an annual dividend of $2.68 per share and has a dividend yield of 7.2%. Chimera Investment pays out 91.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Omega Healthcare Investors pays out 241.4% 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 is clearly the better dividend stock, given its higher yield and lower payout ratio.

Valuation and Earnings

This table compares Chimera Investment and Omega Healthcare Investors’ gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Chimera Investment	$286.07 million	4.21	$126.10 million	$1.53	9.78
Omega Healthcare Investors	$977.40 million	9.46	$242.18 million	$1.11	33.72

Omega Healthcare Investors has higher revenue and earnings than Chimera Investment. Chimera Investment is trading at a lower price-to-earnings ratio than Omega Healthcare Investors, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a breakdown of recent recommendations for Chimera Investment and Omega Healthcare Investors, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Chimera Investment	0	2	0	0	2.00
Omega Healthcare Investors	0	8	3	1	2.42

Chimera Investment presently has a consensus price target of $16.25, indicating a potential upside of 8.55%. Omega Healthcare Investors has a consensus price target of $33.67, indicating a potential downside of 10.05%. Given Chimera Investment’s higher probable upside, research analysts clearly believe Chimera Investment is more favorable than Omega Healthcare Investors.

Profitability

This table compares Chimera Investment and Omega Healthcare Investors’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Chimera Investment	25.73%	7.46%	1.48%
Omega Healthcare Investors	33.52%	8.68%	3.57%

Summary

Omega Healthcare Investors beats Chimera Investment on 12 of the 17 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 Omega Healthcare Investors

Omega is a REIT that invests in the long-term healthcare industry, primarily in skilled nursing and assisted living facilities. Its portfolio of assets is operated by a diverse group of healthcare companies, predominantly in a triple-net lease structure. The assets span all regions within the U.S., as well as in the U.K.