Service Properties Trust (NASDAQ:SVC – Get Free Report) and Cherry Hill Mortgage Investment (NYSE:CHMI – Get Free Report) are both small-cap finance companies, but which is the superior investment? We will compare the two companies based on the strength of their valuation, dividends, institutional ownership, profitability, earnings, analyst recommendations and risk.
Insider and Institutional Ownership
77.6% of Service Properties Trust shares are held by institutional investors. Comparatively, 18.5% of Cherry Hill Mortgage Investment shares are held by institutional investors. 1.4% of Service Properties Trust shares are held by insiders. Comparatively, 1.4% of Cherry Hill Mortgage Investment shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.
Profitability
This table compares Service Properties Trust and Cherry Hill Mortgage Investment’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Service Properties Trust | -12.87% | -22.67% | -3.37% |
| Cherry Hill Mortgage Investment | -60.97% | 15.18% | 1.45% |
Valuation & Earnings
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Service Properties Trust | $1.87 billion | 0.25 | -$32.78 million | ($1.47) | -1.93 |
| Cherry Hill Mortgage Investment | $49.99 million | 1.68 | -$34.79 million | ($1.52) | -1.75 |
Service Properties Trust has higher revenue and earnings than Cherry Hill Mortgage Investment. Service Properties Trust is trading at a lower price-to-earnings ratio than Cherry Hill Mortgage Investment, indicating that it is currently the more affordable of the two stocks.
Volatility and Risk
Service Properties Trust has a beta of 2.19, meaning that its share price is 119% more volatile than the S&P 500. Comparatively, Cherry Hill Mortgage Investment has a beta of 1.39, meaning that its share price is 39% more volatile than the S&P 500.
Dividends
Service Properties Trust pays an annual dividend of $0.04 per share and has a dividend yield of 1.4%. Cherry Hill Mortgage Investment pays an annual dividend of $0.60 per share and has a dividend yield of 22.6%. Service Properties Trust pays out -2.7% of its earnings in the form of a dividend. Cherry Hill Mortgage Investment pays out -39.5% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Cherry Hill Mortgage Investment is clearly the better dividend stock, given its higher yield and lower payout ratio.
Analyst Recommendations
This is a summary of recent recommendations for Service Properties Trust and Cherry Hill Mortgage Investment, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Service Properties Trust | 1 | 0 | 1 | 0 | 2.00 |
| Cherry Hill Mortgage Investment | 0 | 1 | 1 | 0 | 2.50 |
Service Properties Trust presently has a consensus price target of $5.50, indicating a potential upside of 94.35%. Cherry Hill Mortgage Investment has a consensus price target of $5.00, indicating a potential upside of 88.32%. Given Service Properties Trust’s higher probable upside, equities analysts plainly believe Service Properties Trust is more favorable than Cherry Hill Mortgage Investment.
Summary
Service Properties Trust beats Cherry Hill Mortgage Investment on 8 of the 14 factors compared between the two stocks.
About Service Properties Trust
Service Properties Trust (Nasdaq: SVC) is a real estate investment trust with over $11 billion invested in two asset categories: hotels and service-focused retail net lease properties. As of December 31, 2023, SVC owned 221 hotels with over 37,000 guest rooms throughout the United States and in Puerto Rico and Canada, the majority of which are extended stay and select service. As of December 31, 2023, SVC also owned 752 service-focused retail net lease properties totaling approximately 13.3 million square feet throughout the United States. SVC is managed by The RMR Group (Nasdaq: RMR), a leading U.S. alternative asset management company with over $41 billion in assets under management as of December 31, 2023, and more than 35 years of institutional experience in buying, selling, financing and operating commercial real estate. SVC is headquartered in Newton, MA.
About Cherry Hill Mortgage Investment
Cherry Hill Mortgage Investment Corporation, a residential real estate finance company, acquires, invests in, and manages residential mortgage assets in the United States. It operates through Investments in RMBS (residential mortgage-backed securities) and Investments in Servicing Related Assets segments. 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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