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Company Profile: Chimera Investment is a specialty finance company that invests in residential mortgage-backed securities (RMBS), residential mortgage loans and other real estate-related securities. The stock has been an attractive pick for speculators thanks to an enormous 13% dividend yield.
Share Price: $4.17 (March 29)
Stock Performance This Year: 1%
Analyst Consensus: Chimera ranks third of this list with nine "buy" ratings from research firms, including Jefferies, Keefe Bruyette and Woods, and Cantor Fitzgerald. The other three analysts following the company have a "hold" rating on the stock. The average price target of $4.53 represents potential upside of only 8.6%, though.
Bullish Case: Bank of America/Merrill Lynch analyst Kenneth Bruce tempered his outlook on Chimera after the company lowered its first-quarter dividend payment by 3 cents. Still, Bruce maintains a "buy" rating and $4.25 price target on the stock, noting Chimera's relatively high returns on invested capital.
"Despite a modestly lower dividend of 56 cents annually, we believe CIM shares should continue to benefit from robust demand for yield in equity markets, given an implied 13% to14% dividend yield from the current share price," Bruce wrote in the March 22 research report.
TheStreet Ratings doesn't have a rating on Chimera Investment.