Chatham Lodging Trust (NYSE:CLDT) versus Cherry Hill Mortgage Investment (NYSE:CHMI) Critical Review

Chatham Lodging Trust (NYSE:CLDT) and Cherry Hill Mortgage Investment (NYSE:CHMI) are both small-cap finance companies, but which is the better investment? We will contrast the two businesses based on the strength of their valuation, earnings, dividends, profitability, risk, institutional ownership and analyst recommendations.

Earnings & Valuation

This table compares Chatham Lodging Trust 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
Chatham Lodging Trust	$313.94 million	1.29	$2.64 million	($0.12)	-68.83
Cherry Hill Mortgage Investment	$12.56 million	8.16	-$34.79 million	($0.51)	-6.70

Chatham Lodging Trust has higher revenue and earnings than Cherry Hill Mortgage Investment. Chatham Lodging Trust 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.

Institutional and Insider Ownership

88.4% of Chatham Lodging Trust shares are owned by institutional investors. Comparatively, 18.5% of Cherry Hill Mortgage Investment shares are owned by institutional investors. 6.5% of Chatham Lodging Trust shares are owned by insiders. Comparatively, 1.1% of Cherry Hill Mortgage Investment shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Analyst Ratings

This is a breakdown of current ratings and price targets for Chatham Lodging Trust and Cherry Hill Mortgage Investment, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Chatham Lodging Trust	0	0	1	0	3.00
Cherry Hill Mortgage Investment	0	1	1	0	2.50

Chatham Lodging Trust presently has a consensus target price of $12.00, indicating a potential upside of 45.28%. Cherry Hill Mortgage Investment has a consensus target price of $5.00, indicating a potential upside of 46.41%. Given Cherry Hill Mortgage Investment’s higher probable upside, analysts clearly believe Cherry Hill Mortgage Investment is more favorable than Chatham Lodging Trust.

Profitability

This table compares Chatham Lodging Trust and Cherry Hill Mortgage Investment’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Chatham Lodging Trust	-0.01%	N/A	N/A
Cherry Hill Mortgage Investment	-8.28%	16.36%	1.62%

Dividends

Chatham Lodging Trust pays an annual dividend of $0.28 per share and has a dividend yield of 3.4%. Cherry Hill Mortgage Investment pays an annual dividend of $0.60 per share and has a dividend yield of 17.6%. Chatham Lodging Trust pays out -233.3% of its earnings in the form of a dividend. Cherry Hill Mortgage Investment pays out -117.6% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years.

Risk & Volatility

Chatham Lodging Trust has a beta of 1.79, suggesting that its share price is 79% more volatile than the S&P 500. Comparatively, Cherry Hill Mortgage Investment has a beta of 1.46, suggesting that its share price is 46% more volatile than the S&P 500.

Summary

Chatham Lodging Trust beats Cherry Hill Mortgage Investment on 9 of the 15 factors compared between the two stocks.

About Chatham Lodging Trust

Chatham Lodging Trust is a self-advised, publicly traded real estate investment trust (REIT) focused primarily on investing in upscale, extended-stay hotels and premium-branded, select-service hotels. The company owns 39 hotels totaling 5,915 rooms/suites in 16 states and the District of Columbia.

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.