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Chimera Investment Corp. (CIM)
NYSE:CIM
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Chimera Investment
(NYSE:CIM)
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Rating:53Neutral
Price Target:
$12.50
â–¼(-7.68% Downside)
Action:ReiteratedDate:02/12/26
The score is constrained primarily by financial risk factors—high leverage and a recent deterioration in operating/free cash flow—despite a sharp TTM earnings rebound. Earnings-call commentary is constructive (dividend raise and strategy progress), but weak technical momentum and valuation uncertainty from a negative P/E temper the outlook, with the high dividend yield providing partial support.
Positive Factors
Dividend Policy
A sustained dividend increase signals management confidence in recurring distributable earnings and capital allocation. Maintaining a higher payout can anchor investor expectations, support shareholder returns, and discipline capital deployment as the company executes its diversification and liquidity priorities over the next several quarters.
Portfolio Repositioning
Rebalancing into agency MBS and other more liquid instruments materially reduces single‑sector credit concentration and funding sensitivity. A larger agency sleeve improves access to liquid financing and steadier run‑rate ROEs, making portfolio returns less dependent on idiosyncratic residential credit moves over the medium term.
Fee and Origination Growth
Acquiring Home Express and growing third‑party AUM builds a fee‑based, less capital‑intensive revenue stream and vertical origination capability. Recurring servicing/gain‑on‑sale economics and larger AUM diversify income sources and reduce reliance on portfolio spread capture alone for durable earnings growth.
Negative Factors
High Leverage
Sustained high leverage magnifies sensitivity to funding cost swings, asset‑value declines, and movement in securitization spreads. With leverage structurally elevated, the firm faces limited financial flexibility and greater refinancing risk, making earnings and book value more cyclical across rate and credit cycles.
Weakening Cash Generation
A TTM reversal to negative operating/free cash flow signals that accounting profits aren’t fully translating to cash, increasing reliance on asset sales, securitization or new financing to fund dividends and growth. Persistent cash volatility undermines the sustainability of distributions and strategic reinvestment plans.
GAAP/Mark‑to‑Market Volatility
Large consolidated securitization liabilities cause mark‑to‑market swings that can depress GAAP metrics even as economic returns look stronger. This accounting volatility complicates investor assessment of intrinsic performance and can pressure capital ratios or dividend optics during rate or spread dislocations.
Chimera Investment (CIM) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$1.15B
Dividend Yield11.4%
Average Volume (3M)878.41K
Price to Earnings (P/E)8.0
Beta (1Y)0.78
Revenue Growth9.46%
EPS Growth-111.44%
CountryUS
Employees77
SectorReal Estate
Sector Strength53
IndustryREIT - Mortgage
Share Statistics
EPS (TTM)0.53
Shares Outstanding83,151,405
10 Day Avg. Volume1,232,651
30 Day Avg. Volume878,408
Financial Highlights & Ratios
PEG Ratio0.03
Price to Book (P/B)0.40
Price to Sales (P/S)1.24
P/FCF Ratio-4.10
Enterprise Value/Market Cap12.13
Enterprise Value/Revenue19.97
Enterprise Value/Gross Profit20.98
Enterprise Value/Ebitda41.95
Forecast
1Y Price Target
$14.50Price Target Upside7.09% Upside
Rating ConsensusHold
Number of Analyst Covering2
EPS Forecast (FY)N/A
Revenue Forecast (FY)N/A
Chimera Investment Business Overview & Revenue Model
Company DescriptionChimera Investment Corporation operates as a real estate investment trust (REIT) in the United States. The company, through its subsidiaries, invests in a portfolio of mortgage assets, including residential mortgage loans, agency and non-agency residential mortgage-backed securities, agency mortgage-backed securities secured by pools of residential, commercial mortgage loans, and other real estate related securities. It has elected to be taxed as a REIT. In addition, the company invests in investment, non-investment grade, and non-rated classes. The company was incorporated in 2007 and is based in New York, New York.
How the Company Makes MoneyChimera Investment Corporation makes money primarily through the interest income generated from its portfolio of mortgage-backed securities. The company invests in various types of mortgage assets, including agency and non-agency RMBS and CMBS, which provide returns through the collection of interest payments. Additionally, Chimera may engage in hedging activities to manage interest rate risk and enhance yield. The company also benefits from capital appreciation of its investments and may leverage its portfolio to amplify returns. Strategic partnerships and relationships with financial institutions can also play a role in optimizing asset acquisition and management, contributing to overall earnings.
Chimera Investment Earnings Call Summary
Earnings Call Date:Feb 11, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:Apr 30, 2026
Earnings Call Sentiment Positive
The call conveyed strong execution on a multi‑year transformation: successful acquisition and integration of Home Express, meaningful capital generation (> $600M) and redeployment, AUM growth (+~18%), a clear shift toward a more liquid, diversified portfolio, a 22% dividend increase, and improving distributable returns (EAD ROEs up ~400 bps). Offsetting these positives were near‑term accounting and liquidity impacts: a modest Q4 GAAP net income ($7M), a decline in GAAP book value (–~2.7% in Q4) driven by mark‑to‑market increases in securitized debt, reduced cash balances after the acquisition, higher operating and transaction expenses, and quarter‑to‑quarter variability from non‑recurring items. Overall, management portrayed durable progress toward a hybrid REIT operating model with improving earnings power and liquidity tools, while noting short‑term volatility and accounting effects that depress GAAP metrics.Q4-2025 Updates
Positive Updates
Dividend Increase
Board raised the quarterly dividend to $0.45 for Q1 2026, a 22% increase quarter-over-quarter, and expects to maintain that level for the remainder of the year.
Third‑Party AUM Growth
Third‑party assets under management increased from $22 billion to $26 billion, a rise of $4 billion (≈18.2%), expanding fee-income and advisory scale.
Significant Capital Generation and Redeployment
Generated aggregate capital of more than $600 million in 2025 via refinancing ($291M), divestitures (~$195M), and an unsecured notes offering (~$116M); separately cited ~ $485M from asset sales and collapsing securitizations to redeploy into higher‑value activities.
Home Express Acquisition and Strong Origination Performance
Closed acquisition of Home Express (≈$244M cash, $272M total consideration). Home Express originated $1.04 billion in Q4 (a record, +18% QoQ) and $3.4 billion for full year 2025. Q4 EBITDA was $11M, annualized EBITDA ROE 16.2%, gain‑on‑sale premium 358 bps, GAAP cost to originate reached a record low of 201 bps, and warehouse capacity was increased to $1.35B.
Portfolio Repositioning Toward Liquidity and Diversification
Shifted capital allocation materially: from a high concentration in residential credit to a more balanced mix — ended year at ~61% loans, 16% agency securities, 10% non‑agency, 11% lending activities and 1% MSRs (management also characterized a move from ~97% residential credit to ~72% overall), and purchased over $3 billion of Agency MBS during 2025 (net of sales).
Improved Earnings Power and Distributable Returns
Earnings available for distribution (EAD) was $45M in Q4 ($0.53 per share) and $141M for full year ($1.68 per share). Investment‑portfolio economic NII return on average equity was 10.8% for 2025; EAD return on average equity was ~11.0% (EAD return on average tangible equity 11.9%). First full quarter contribution from Home Express produced distributable ROE (EAD/avg common equity) annualized ~11% vs 7.16% in 2024 (~+400 bps).
Net Interest Income and Spread Metrics
Investment portfolio economic net interest income in Q4 was $65M; yield on average interest‑earning assets 5.9%, average cost of funds 4.5%, producing a net interest spread of 1.4%.
Hedging and Liquidity Management
Maintained hedges of ~$2.9B against ~$3.3B agency RMBS exposure and ~$2.15B of swaps/options/caps against residential credit interest rate risk; agency holdings provide liquidity and run‑rate ROEs in the low‑ to mid‑double digits at ~7.5x leverage on that sleeve.
Favorable Market Movements for Mortgage Products
Mortgage rates fell roughly 70 bps during 2025, ending near 6.15%; non‑QM AAA spreads tightened ~20–25 bps year‑to‑date, supporting stronger issuer demand and secondary market conditions for Home Express production.
Negative Updates
Quarterly GAAP Earnings Weakness and Book Value Pressure
GAAP net income for Q4 was only $7M ($0.08 per share); GAAP book value ended Q4 at $19.70 per share. The company reported a negative 0.9% economic return on GAAP book value for Q4 and cited an overall book value decline of ~2.7% in the quarter driven largely by increases in the fair value of securitized debt and acquisition activity.
Reduced Cash and Unencumbered Liquidity
Total cash and unencumbered assets decreased to $528M at year‑end from $752M at the end of Q3, reflecting the ~$244M cash portion of the Home Express acquisition and other capital deployments.
Higher Operating and Transaction Expenses
Compensation, general and administrative expenses increased by $22M year‑over‑year primarily due to Palisade and Home Express acquisitions; transaction expenses were $10M higher in 2025 related to the Home Express deal. Q4 benefited from non‑recurring lower compensation (severance absence and lower incentive accrual) that added ~$0.05 to EAD but is not expected to persist.
Leverage and Securitization Valuation Sensitivity
Total company leverage ended Q4 at 5.1x with $6.0B of consolidated secured financing outstanding. Management noted that yield‑curve steepening increased loan values but increased the fair value of securitized debt by more, pressuring reported book value — a mark‑to‑market sensitivity driven by consolidated securitized liabilities.
Seasonal Deterioration in Delinquencies
Seasoned re‑performing loan portfolio experienced a ~50 basis‑point uptick in delinquencies in Q4 (primarily seasonal/housing turnover driven), a trend flagged though described as otherwise stable.
Accounting Returns Below Economic Returns
GAAP return on average equity for the investment portfolio was 4.4%, materially below economic/EAD measures (~10.8% / 11%), indicating accounting and valuation timing effects that depress reported GAAP metrics vs economic performance.
Non‑Recurring Benefits and Uncertainty of Sustainability
Some Q4 benefits (lower severance and incentive accruals) are one‑time, and management cautioned that certain compensation‑related benefits (~$0.05 EAD uplift) are not expected to continue, introducing some near‑term variability to distributable earnings.
Company Guidance
Management guided that the board has declared a Q1‑2026 dividend of $0.45 per share (a 22% quarter‑over‑quarter increase) and expects to maintain that level for the remainder of the year while pursuing 2026 priorities to diversify the portfolio, expand liquidity, and grow fee‑based income—deploying capital into Agency MBS, MSRs and sponsored securitizations backed by Home Express and continuing securitization redemptions and selective divestitures. As of Q4 the company reported $528M of cash/unencumbered assets, $6.0B of consolidated secured financing (including $802M warehouse and $5.2B for the investment portfolio, $3.3B of which finances agency RMBS), total leverage 5.1x (Rico 2.4x), an agency portfolio at ~7.5x leverage generating low‑to‑mid double‑digit run‑rate ROEs, and management noted >$600M of redeployable capital in 2025 (including ~$485M from asset sales/collapsed securitizations and ~$116M from unsecured notes). The guidance is supported by Q4 operating/earnings metrics—economic NII $65M (yield on interest‑earning assets 5.9%, cost of funds 4.5%, NII spread 1.4%), Q4 EAD $45M ($0.53) and FY EAD $141M ($1.68) with EAD ROAE ~11% (EAD ROTA 11.9%), GAAP book value $19.70, FY GAAP net income $144M ($1.72)—and by Home Express contributions (Q4 originations $1.04B; FY $3.4B; gain‑on‑sale premium 358 bps; Q4 EBITDA $11M; annualized EBITDA ROE 16.2%; GAAP cost to originate 201 bps; debt margin 111 bps; $1.35B warehouse), with market context of non‑QM AAA spreads tightening ~20–25 bps YTD and mortgage rates near 6.15%.Chimera Investment Financial Statement Overview
Summary
Despite a strong TTM earnings rebound and high profitability, the financial profile is held back by structurally high leverage (mortgage REIT risk) and a TTM swing to negative operating/free cash flow, which raises concerns about earnings quality and durability.Income Statement
TTM (Trailing-Twelve-Months) results show a sharp revenue rebound (+64%) and very strong profitability, with net income of ~$230.5M on ~$290.9M of revenue (high net margin). However, earnings have been volatile across the cycle (notably a large loss in 2022 with negative revenue and net income), which lowers confidence in the durability of the run-rate despite the recent recovery.66
Positive
Balance Sheet
The balance sheet reflects the typical leverage profile of a mortgage REIT, with high debt levels in the annual periods (debt-to-equity roughly ~3.0–4.0x from 2020–2024), which increases sensitivity to funding costs and asset value swings. Equity has been relatively stable, and returns on equity improved from negative in 2022 to positive in 2023–2024 and ~8.9% in TTM (Trailing-Twelve-Months), but the overall leverage risk remains a meaningful constraint.48
Neutral
Cash Flow
Cash generation weakened materially in TTM (Trailing-Twelve-Months), with operating cash flow and free cash flow turning negative (~-$96.1M) despite strong reported net income, signaling potential volatility in working capital/portfolio cash movements. Prior annual periods (2020–2024) were consistently positive on operating/free cash flow, but the TTM reversal and choppy growth trajectory reduce cash-flow quality and reliability.34
Negative
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 820.77M | 257.93M | 204.77M | -415.21M | 1.06B |
| Gross Profit | 778.67M | 257.93M | 204.77M | -415.21M | 1.06B |
| EBITDA | 794.87M | 0.00 | 0.00 | 0.00 | 0.00 |
| Net Income | 230.50M | 176.06M | 126.10M | -513.07M | 670.11M |
Balance Sheet | |||||
| Total Assets | 15.81B | 13.12B | 12.93B | 13.40B | 15.41B |
| Cash, Cash Equivalents and Short-Term Investments | 278.58M | 84.11M | 221.68M | 264.60M | 385.74M |
| Total Debt | 13.07B | 10.01B | 10.11B | 10.61B | 11.08B |
| Total Liabilities | 13.24B | 10.59B | 10.37B | 10.74B | 11.67B |
| Stockholders Equity | 2.57B | 2.53B | 2.56B | 2.67B | 3.74B |
Cash Flow | |||||
| Free Cash Flow | -248.88M | 205.67M | 213.27M | 325.72M | 519.18M |
| Operating Cash Flow | -248.88M | 205.67M | 213.27M | 325.72M | 519.18M |
| Investing Cash Flow | -23.19M | 178.22M | 551.75M | 509.84M | 2.55B |
| Financing Cash Flow | 0.00 | -521.58M | -807.94M | -956.70M | -2.95B |
Chimera Investment Technical Analysis
Positive
13.54
Price Trends
12.88
Positive
12.79
Positive
13.02
Positive
Market Momentum
0.22
Negative
59.05
Neutral
76.75
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CIM, the sentiment is Positive. The current price of 13.54 is above the 20-day moving average (MA) of 12.92, above the 50-day MA of 12.88, and above the 200-day MA of 13.02, indicating a bullish trend. The MACD of 0.22 indicates Negative momentum. The RSI at 59.05 is Neutral, neither overbought nor oversold. The STOCH value of 76.75 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for CIM.
Chimera Investment Risk Analysis
Chimera Investment disclosed 62 risk factors in its most recent earnings report. Chimera Investment reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Chimera Investment Peers Comparison
UnderperformOutperform
Sector (65)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
67 Neutral | $1.03B | 7.75 | 9.59% | 14.90% | 5.52% | -47.72% | |
65 Neutral | $2.17B | 12.19 | 3.79% | 4.94% | 3.15% | 1.96% | |
60 Neutral | $1.58B | 9.59 | 9.23% | 11.37% | 70.94% | 2.95% | |
57 Neutral | $1.14B | 6.08 | 15.59% | 20.03% | 72.30% | -54.02% | |
55 Neutral | $1.08B | 12.61 | 6.67% | 12.69% | -15.48% | -36.45% | |
53 Neutral | $1.15B | 8.01 | 9.04% | 11.40% | 9.46% | -111.44% | |
45 Neutral | $1.18B | -2.29 | -23.25% | 14.29% | 22.48% | 50.49% |
* Real Estate Sector Average
CIM
Chimera Investment
13.54
0.90
7.09%
EFC
Ellington Financial
12.37
0.71
6.06%
MFA
MFA Financial
10.06
0.82
8.85%
TWO
Two Harbors
10.78
-1.24
-10.33%
PMT
PennyMac Mortgage
12.29
-0.13
-1.05%
ORC
Orchid Island Capital
7.58
0.32
4.34%
Chimera Investment Corporate Events
Dividends
Chimera Investment Boosts Common and Preferred Stock Dividends
Positive
Feb 11, 2026
On February 11, 2026, Chimera Investment Corporation’s board declared a first-quarter 2026 cash dividend of $0.45 per common share, raising the payout from the fourth quarter 2025 level of $0.37. The common dividend will be paid on April 30, 2026 to shareholders of record as of March 31, 2026, with the same date set as the ex-dividend date.
The board also declared first-quarter 2026 cash dividends on all four series of its preferred stock, including $0.50 per share on its 8.00% Series A and floating-rate payouts of $0.6078, $0.5423, and $0.5820 per share on its Series B, C, and D issues, respectively. These preferred dividends, reflecting coupon rates tied to three-month CME Term SOFR plus applicable spreads, are payable on March 30, 2026 to holders of record on March 2, 2026, highlighting Chimera’s ongoing distribution to both common and preferred shareholders.
The most recent analyst rating on (CIM) stock is a Hold with a $13.50 price target. To see the full list of analyst forecasts on Chimera Investment stock, see the CIM Stock Forecast page.
Dividends
Chimera Investment Declares Fourth-Quarter 2025 Cash Dividend
Positive
Dec 18, 2025
On December 18, 2025, Chimera Investment Corporation announced that its board of directors had declared a fourth-quarter 2025 cash dividend of $0.37 per share of common stock, reinforcing its ongoing capital-return strategy to shareholders. The dividend is scheduled to be paid on January 30, 2026, to common stockholders of record as of December 31, 2025, with the same date serving as the ex-dividend date, signaling continued confidence in the company’s earnings capacity and cash flow generation from its diversified mortgage-focused investment portfolio.
The most recent analyst rating on (CIM) stock is a Hold with a $13.00 price target. To see the full list of analyst forecasts on Chimera Investment stock, see the CIM Stock Forecast page.
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.