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1. Company Snapshot

1.a. Company Description

Cherry Hill Mortgage Investment Corporation, a residential real estate finance company, acquires, invests in, and manages residential mortgage assets in the United States.The company operates through Investments in RMBS (residential mortgage-backed securities), Investments in Servicing Related Assets, and All Other segments.It manages a portfolio of servicing related assets and RMBS.


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.

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1.b. Last Insights on CHMI

The recent earnings release of Cherry Hill Mortgage Investment Corporation (CHMI) highlights several positive drivers behind its performance. The company reported GAAP net income applicable to common stockholders of $9.1 million, or $0.29 per share, and earnings available for distribution ("EAD") attributable to common stockholders of $3.3 million, or $0.10 per diluted share, in line with expectations. The company's common book value per share of $3.82 at December 31, 2024, also indicates a strong financial position. Additionally, the company has a high dividend yield of 17.44%, which may attract investors seeking income.

1.c. Company Highlights

2. Cherry Hill Mortgage Investment's Q3 Earnings: A Closer Look

Cherry Hill Mortgage Investment Corporation reported GAAP net income applicable to common stockholders of $2 million or $0.05 per diluted share for the third quarter of 2025, missing analyst estimates of $0.11 per share. The company's book value per common share finished the quarter at $3.36. The actual EPS figure was lower than expected, but the company still managed to declare a dividend of $0.10 per common share for the quarter. Revenue growth for next year is estimated to be 81.7%, indicating a significant potential increase in the company's financial performance.

Publication Date: Nov -26

📋 Highlights
  • GAAP Net Income:: $2 million ($0.05 per diluted share) for Q3 2025, driven by mortgage spread tightening and lower coupon mortgages outperforming.
  • MSR Portfolio Performance:: Weighted average note rate of 3.5%, with net CPR averaging 5.9% and de minimis recapture rate during the quarter.
  • RMBS Prepayment Speeds:: Steady at 6.1% CPR for the 3-month period ended September, reflecting stable prepayment activity.
  • Book Value & Liquidity:: Book value per share at $3.36, NAV increased by $1.1 million (0.5%), and unrestricted cash rose to $55 million.
  • Dividend Declared:: $0.10 per common share paid on October 31, 2025, alongside dividends on Series A and B preferred stocks.

Financial Performance and Leverage

The company's financial leverage at the end of the quarter remained consistent at 5.3x, and it ended the quarter with $55 million of unrestricted cash. The company's NAV was up approximately $1.1 million or 0.5% relative to June 30. The stable financial leverage and increase in NAV suggest that the company is managing its finances effectively.

Portfolio Performance

Cherry Hill's MSR portfolio continued to perform well, with a weighted average note rate of 3.5% and a net CPR averaged approximately 5.9% for the third quarter. The RMBS portfolio prepayment speeds held steady at 6.1% CPR for the 3-month period ended September. As Jay Lown, President and CEO, highlighted during the earnings call, the reduction in mortgage rates and investors' growing demand for duration drove performance in the quarter.

Valuation and Dividend Yield

With a P/B Ratio of 0.36 and a Dividend Yield of 23.91%, Cherry Hill Mortgage Investment Corporation appears to be an attractive investment opportunity, particularly for income-seeking investors. The low P/B ratio suggests that the company's stock may be undervalued relative to its book value. Additionally, the high dividend yield indicates that the company is committed to returning value to its shareholders.

Outlook and Growth Prospects

3. NewsRoom

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Cherry Hill Mortgage Investment Corporation (NYSE:CHMI) Receives Consensus Recommendation of “Hold” from Analysts

Dec -01

Source: defenseworld.net

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Want $4,000 per Year in Passive Income? Invest Just $2,500 in These Big-Yield Dividend Stocks

Nov -26

Source: 247wallst.com

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Granite Point Mortgage Trust (NYSE:GPMT) & Cherry Hill Mortgage Investment (NYSE:CHMI) Critical Contrast

Nov -12

Source: defenseworld.net

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Cherry Hill Mortgage Investment Corporation (CHMI) Q3 2025 Earnings Call Transcript

Nov -07

Source: seekingalpha.com

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Cherry Hill Mortgage (CHMI) Q3 Earnings Miss Estimates

Nov -07

Source: zacks.com

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Cherry Hill Mortgage Investment Corporation Announces Third Quarter 2025 Results

Nov -06

Source: businesswire.com

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14% Dividend Yield Is Not Enough

Oct -31

Source: seekingalpha.com

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Cherry Hill Mortgage Investment Corporation Sets Date for Third Quarter 2025 Earnings Release and Conference Call

Oct -30

Source: businesswire.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (7.47%)

6. Segments

Servicing Related Assets

Expected Growth: 7.43%

Cherry Hill Mortgage Investment Corporation's Servicing Related Assets growth of 7.43% is driven by increasing mortgage servicing rights (MSRs) valuations, expansion of mortgage loan origination volumes, and a rise in interest rates. Additionally, the company's strategic acquisitions and effective cost management have contributed to the growth.

Residential Mortgage-backed Securities

Expected Growth: 7.53%

The 7.53% growth in Residential Mortgage-backed Securities from Cherry Hill Mortgage Investment Corporation is driven by increasing demand for housing, low interest rates, and government-backed guarantees. Additionally, the corporation's diversified portfolio, strong credit quality, and efficient risk management practices contribute to its growth. Furthermore, the Federal Reserve's accommodative monetary policy and the ongoing economic recovery also support the growth of the RMBS market.

7. Detailed Products

Mortgage Servicing Rights

Cherry Hill Mortgage Investment Corporation acquires and manages mortgage servicing rights, which provide a steady stream of income from the servicing of mortgage loans.

Excess Mortgage Servicing Rights

The company acquires and manages excess mortgage servicing rights, which provide additional income from the servicing of mortgage loans.

Mortgage-Backed Securities

Cherry Hill Mortgage Investment Corporation invests in mortgage-backed securities, which provide a return based on the cash flows from the underlying mortgage loans.

Whole Loans

The company acquires and manages whole loans, which provide a return based on the interest and principal payments from the underlying mortgage loans.

Non-Agency Residential Mortgage-Backed Securities

Cherry Hill Mortgage Investment Corporation invests in non-agency residential mortgage-backed securities, which provide a return based on the cash flows from the underlying mortgage loans.

8. Cherry Hill Mortgage Investment Corporation's Porter Forces

Forces Ranking

Threat Of Substitutes

Cherry Hill Mortgage Investment Corporation operates in a highly competitive industry, and there are many substitutes available to customers. However, the company's focus on mortgage investments and its diversified portfolio help to mitigate the threat of substitutes.

Bargaining Power Of Customers

Cherry Hill Mortgage Investment Corporation's customers are primarily institutional investors, who have limited bargaining power due to the company's strong brand reputation and diversified portfolio.

Bargaining Power Of Suppliers

Cherry Hill Mortgage Investment Corporation relies on a diverse range of suppliers, including mortgage originators and servicers. While suppliers have some bargaining power, the company's scale and diversified portfolio help to mitigate this threat.

Threat Of New Entrants

The mortgage investment industry is highly competitive, and new entrants can easily enter the market. Cherry Hill Mortgage Investment Corporation's strong brand reputation and diversified portfolio help to mitigate this threat, but the company must continue to innovate and adapt to changing market conditions.

Intensity Of Rivalry

The mortgage investment industry is highly competitive, with many established players competing for market share. Cherry Hill Mortgage Investment Corporation must continue to differentiate itself through its diversified portfolio and strong brand reputation to maintain its market position.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 81.19%
Debt Cost 4.62%
Equity Weight 18.81%
Equity Cost 11.57%
WACC 5.92%
Leverage 431.49%

11. Quality Control: Cherry Hill Mortgage Investment Corporation passed 1 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

2.48$

Current Price

2.48$

Potential

-0.00%

Expected Cash-Flows