Chimera Investment Corp (CIM)

Price$11.64Cached quoteAs of 2026-09-05 02:52 UTC

AI: Undervalued

Price checkThe shares trade at a substantial discount to reported common book value while offering a very high dividend yield, creating meaningful upside if book value and distributable earnings stabilize.

The market valuation is roughly 61% of June GAAP book value per common share of $17.75, implying a discount of about 39%. The $1.80 annualized common dividend equates to a yield of roughly 16.6%, while second-quarter earnings available for distribution were $0.46 per share against a $0.45 dividend. First-half EAD of $1.00 also exceeded $0.90 of common dividends. Those metrics look inexpensive, although the discount partly reflects continued book-value erosion and the narrow margin of current dividend coverage.

Big pictureChimera is a leveraged residential mortgage-credit REIT whose economics depend more on asset yields, funding costs, credit performance and book value than on conventional revenue growth.

Second-quarter net interest income was $70.5 million as average interest-earning assets yielded 5.9% and economic funding costs averaged 4.3%, producing a 1.6% net interest spread versus 1.8% in the first quarter. The portfolio has shifted toward a combination of Agency RMBS and residential credit: Agency RMBS represented about 35% of the portfolio and securitized loans about 52% at quarter-end. HomeXpress adds a mortgage-origination engine, with $1.1 billion of second-quarter originations, up 30% from its comparable standalone period, focused predominantly on Non-QM consumer and investor loans.

Business strengthLiquidity and distributable earnings are currently supportive, but the simple cash-versus-long-term-debt figures materially understate the leverage inherent in the mortgage-REIT model.

Cash increased to $444.0 million and reported long-term debt was $252.6 million, but Chimera also had roughly $7.7 billion of secured financing agreements and $5.5 billion of securitized debt. Total interest-bearing liabilities were approximately $13.45 billion, with GAAP leverage of 5.6 times and recourse leverage of 3.3 times, both higher than at year-end. Much of the securitized debt is tied to consolidated VIE assets and is non-recourse to Chimera, but secured funding, hedging and margin requirements still create liquidity sensitivity. Common book value fell from $19.70 at year-end to $18.34 in March and $17.75 in June, while second-quarter net income of $17.4 million became a $4.0 million loss available to common shareholders after preferred dividends.

What could change the storyStable book value, sustained dividend coverage and profitable integration of mortgage origination with securitization could close part of the valuation discount; renewed rate volatility or mortgage-credit deterioration could keep it wide.

The bull case centers on HomeXpress supplying attractive new loans to Chimera, repeated securitizations lowering or terming out funding costs, and the large book-value discount narrowing if EAD continues to cover the dividend. Chimera completed two residential mortgage re-securitizations totaling $487 million in the second quarter and was preparing its first securitization using HomeXpress collateral. The bear case is that higher financing costs further compress the net interest spread, interest-rate and spread volatility reduce MBS values and common book value, or weaker borrowers generate higher credit losses. Retaining subordinate interests in securitizations adds credit exposure, while leverage can magnify both gains and losses and increases sensitivity to collateral values and financing liquidity.

AI: News

Second-quarter distributable earnings continued to cover the common dividendEarnings available for distribution remained sufficient to fund the quarterly common payout, but book value declined again.

Chimera reported second-quarter EAD of $39 million, or $0.46 per adjusted diluted common share, versus a $0.45 common dividend. First-half EAD reached $1.00 per share. GAAP book value ended June at $17.75 per common share, down from $18.34 in March, and management said interest-rate and spread movements affected book value. The company emphasized maintaining dividend coverage and liquidity through the second half.

Residential securitization and HomeXpress activity expandedChimera is increasingly linking its mortgage-origination platform with its investment and securitization businesses.

During the second quarter, Chimera completed two re-securitizations of residential mortgage loans with an aggregate principal balance of $487 million and purchased another $122 million of newly originated HomeXpress loans, bringing retained HomeXpress loans to $301 million. HomeXpress originated $1.1 billion of loans during the quarter, and Chimera advanced plans for its first securitization backed by HomeXpress collateral. The 10-Q also describes the CIM 2026-R1 and CIM 2026-NR1 securitizations, in which Chimera sold senior securities and retained subordinate interests.

Board maintained the higher common dividendThe second-quarter common payout was held at the level introduced earlier in 2026, reinforcing management's income-distribution commitment.

In June, the board maintained the quarterly common dividend at $0.45 per share, equivalent to an annualized $1.80 distribution. The dividend had been raised from $0.37 for the first quarter, when the board also stated that it expected to maintain the higher quarterly rate for the rest of 2026. Subsequent second-quarter EAD narrowly covered that payout, making future EAD generation and preservation of book value central to dividend sustainability.

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Financial statements

	2025	2024	2023	2022	2021	2020	2019	2018	2017	2016	2015	2014	2013	2012	2011	2010	2009	2008
Revenue	$356.8M	$257.9M	$204.8M	−$415.2M	—	—	—	—	—	—	—	—	—	—	—	—	—	—
Net income	$230.5M	$176.1M	$126.1M	−$513.1M	$670.1M	$88.9M	$413.6M	$411.6M	$524.7M	$551.9M	$250.3M	$589.2M	$362.7M	$327.8M	$137.3M	$248.4M	$230.7M	−$119.8M
Net profit margin	64.59%	68.26%	61.58%	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—
Basic EPSper basic share	$1.76	$1.12	$0.68	-$7.53	$7.65	$0.21	$5.46	$5.91	$7.86	$8.79	$3.75	$8.61	$5.31	$4.80	$1.95	$4.50	$6.90	-$28.50
Diluted EPSper diluted share	$1.72	$1.10	$0.68	-$7.53	$7.32	$0.21	$5.43	$5.88	$7.83	$8.76	$3.75	$8.61	$5.28	$4.80	$1.95	$4.50	$6.75	—

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Owners

Reported shareholders

Ownership data is not available for this listing yet.

Insider buys & sells

Jul 1, 2024–Jun 30, 2026

Buys4$2.65M disclosed value

Sells (SEC code S)0$0.00 disclosed value

Transaction	Insider	Type	Shares	Price	Value	Owned after
Mar 11, 2025Form 4	CREAGH GERARDDirector	BuyCommon Stock	12.5K	$13.31	$166.4K	138.1K
Dec 10, 2024Form 4	Macdowell Jack Lee JrChief Investment Officer	BuyCommon Stock	66.0K	$15.13	$998.6K	166.0K
Dec 9, 2024Form 4	Macdowell Jack Lee JrChief Investment Officer	BuyCommon Stock	50.0K	$14.91	$745.5K	100.0K
Dec 6, 2024Form 4	Macdowell Jack Lee JrChief Investment Officer	BuyCommon Stock	50.0K	$14.70	$735.0K	50.0K

Review ownership filings at SEC.gov ↗

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Chimera Investment Corp (CIM)

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