Cherry Hill Mortgage Q4 Earnings Match Estimates, Shares Rise Amid Market Decline

Cherry Hill Mortgage (CHMI) Q4 earnings of $0.10 per share match estimates. Revenues of $0.66 million miss the consensus estimate by 54.64%. The company's shares have added 29.9% this year versus the S&P 500's decline of 0.7%. The Zacks Rank is #3 (Hold) based on mixed estimate revisions trend. The current consensus EPS estimate is $0.13 for the coming quarter and $0.59 for the current fiscal year.

Cherry Hill Mortgage Investment Corporation (CHMI) reported its Q4 and full-year 2024 earnings, showcasing a mixed performance with earnings per share (EPS) meeting estimates but revenues missing the mark [1]. Although the company's shares have gained 29.9% year-to-date, outpacing the S&P 500's decline [1], concerns over dividend coverage dynamics and strategic restructuring have emerged.

GAAP net income for Q4 came in at $9.1 million, or $0.29 per share. Earnings available for distribution (EAD), however, were lower at $3.3 million, or $0.10 per share [1]. This 150% payout ratio raises questions about the sustainability of the current $0.15 quarterly dividend, which translates to a 17.5% annualized yield [1].

The company's internalization of management is a strategic shift expected to reduce operating expenses. However, the $0.5 million in special committee expenses incurred during this transition created a short-term drag on results [1].

Book value per share stood at $3.82, positioning the stock at a 10.2% discount to its current price of $3.43 [1]. Portfolio metrics remain stable, with leverage at 5.3x and $46.3 million in unrestricted cash [1].

Cherry Hill Mortgage's Q4 results reveal a significant gap between GAAP earnings and EAD. The difference stems primarily from unrealized gains on derivatives and servicing assets, which are not sustainable components of recurring income [1].

Investors should focus on the EAD figure as a more reliable indicator of dividend-supporting capacity. Despite the challenges, Cherry Hill Mortgage's results exemplify the classic balancing act between generating income and managing risk in the mortgage REIT sector.

[1] StockTitan.net. (2024, February 15). Cherry Hill Mortgage Investment Corporation Announces Fourth Quarter and Full Year 2024 Results. https://www.stocktitan.net/news/CHMI/cherry-hill-mortgage-investment-corporation-announces-fourth-quarter-111js02syqtn.html