Billionaire Leon Cooperman’s New High Dividend Pick: Chimera Investment Corporation (CIM)

Other real estate investment trusts with high yields include Annaly Capital Management, Inc. (NYSE:NLY), American Capital Agency Corp. (NASDAQ:AGNC), Capstead Mortgage Corporation (NYSE:CMO), and MFA Financial, Inc. (NYSE:MFA) . All four of these companies invest a significant share of their capital in mortgage backed and other real estate related securities. They are also up to date as far as their financial disclosures, and in fact their P/B multiples are much in line with Chimera’s, generally in the 0.9 to 1.0 range. Annaly and American Capital Agency also offer dividend yields of more than 10% going by recent dividend payments and the current stock price. The other two peers offer high dividend yields as well: Capstead’s is just shy of 10% while MFA’s yield is about 9%. Of course, as investors in subprime mortgages they are likely exposed to the same macro factors as Chimera.

We’re not sure that Chimera is a particularly good opportunity compared to its peers. It’s hard to see its filing problems as anything other than a signal of poor management and governance, and the stock doesn’t seem cheap compared to similar companies on a book basis. While the dividend yield is high, so is that of other companies such as Annaly and American Capital Agency. While Cooperman’s interest is notable we would recommend that investors research at least those other two companies before making a buy decision.

The article Billionaire Leon Cooperman’s New High Dividend Pick originally appeared on Fool.com and is written by Jake Mann.

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