Head-To-Head Review: Chimera Investment (NYSE:CIM) vs. Alexandria Real Estate Equities (NYSE:ARE)

Alexandria Real Estate Equities (NYSE:ARE) and Chimera Investment (NYSE:CIM) are both finance companies, but which is the superior business? We will compare the two businesses based on the strength of their analyst recommendations, earnings, dividends, risk, institutional ownership, profitability and valuation.

Risk and Volatility

Alexandria Real Estate Equities has a beta of 1.24, indicating that its stock price is 24% more volatile than the S&P 500. Comparatively, Chimera Investment has a beta of 1.47, indicating that its stock price is 47% more volatile than the S&P 500.

Earnings and Valuation

This table compares Alexandria Real Estate Equities and Chimera Investment”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Alexandria Real Estate Equities	$3.05 billion	4.41	$322.95 million	$1.80	43.20
Chimera Investment	$257.93 million	3.57	$176.07 million	$1.08	10.52

Alexandria Real Estate Equities has higher revenue and earnings than Chimera Investment. Chimera Investment is trading at a lower price-to-earnings ratio than Alexandria Real Estate Equities, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a breakdown of current ratings and price targets for Alexandria Real Estate Equities and Chimera Investment, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Alexandria Real Estate Equities	0	9	2	0	2.18
Chimera Investment	0	2	0	0	2.00

Alexandria Real Estate Equities presently has a consensus target price of $118.60, indicating a potential upside of 52.52%. Chimera Investment has a consensus target price of $16.00, indicating a potential upside of 40.78%. Given Alexandria Real Estate Equities’ stronger consensus rating and higher possible upside, analysts plainly believe Alexandria Real Estate Equities is more favorable than Chimera Investment.

Institutional & Insider Ownership

96.5% of Alexandria Real Estate Equities shares are held by institutional investors. Comparatively, 48.4% of Chimera Investment shares are held by institutional investors. 1.2% of Alexandria Real Estate Equities shares are held by insiders. Comparatively, 0.9% of Chimera Investment shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Profitability

This table compares Alexandria Real Estate Equities and Chimera Investment’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Alexandria Real Estate Equities	10.36%	1.43%	0.85%
Chimera Investment	20.28%	7.00%	1.41%

Dividends

Alexandria Real Estate Equities pays an annual dividend of $5.28 per share and has a dividend yield of 6.8%. Chimera Investment pays an annual dividend of $1.48 per share and has a dividend yield of 13.0%. Alexandria Real Estate Equities pays out 293.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Chimera Investment pays out 137.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Alexandria Real Estate Equities has increased its dividend for 15 consecutive years. Chimera Investment is clearly the better dividend stock, given its higher yield and lower payout ratio.

Summary

Alexandria Real Estate Equities beats Chimera Investment on 11 of the 17 factors compared between the two stocks.

About Alexandria Real Estate Equities

Alexandria Real Estate Equities, Inc. (NYSE: ARE), an S&P 500 company, is a best-in-class, mission-driven life science REIT making a positive and lasting impact on the world. As the pioneer of the life science real estate niche since our founding in 1994, Alexandria is the preeminent and longest-tenured owner, operator, and developer of collaborative life science, agtech, and advanced technology mega campuses in AAA innovation cluster locations, including Greater Boston, the San Francisco Bay Area, New York City, San Diego, Seattle, Maryland, and Research Triangle. Alexandria has a total market capitalization of $33.1 billion and an asset base in North America of 73.5 million SF as of December 31, 2023, which includes 42.0 million RSF of operating properties, 5.5 million RSF of Class A/A+ properties undergoing construction and one near-term project expected to commence construction in the next two years, 2.1 million RSF of priority anticipated development and redevelopment projects, and 23.9 million SF of future development projects. Alexandria has a longstanding and proven track record of developing Class A/A+ properties clustered in life science, agtech, and advanced technology mega campuses that provide our innovative tenants with highly dynamic and collaborative environments that enhance their ability to successfully recruit and retain world-class talent and inspire productivity, efficiency, creativity, and success. Alexandria also provides strategic capital to transformative life science, agrifoodtech, climate innovation, and technology companies through our venture capital platform. We believe our unique business model and diligent underwriting ensure a high-quality and diverse tenant base that results in higher occupancy levels, longer lease terms, higher rental income, higher returns, and greater long-term asset value.

About Chimera Investment

Chimera 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 residential mortgage-backed securities, non-agency residential mortgage-backed securities, agency mortgage-backed securities secured by pools of commercial mortgage loans, business purpose and investor loans, and other real estate related securities. It invests in investment grade, non-investment grade, and non-rated classes. The company qualifies as a real estate investment trust (REIT) for federal income tax purposes. As a REIT, it intends to distribute at least 90% of its taxable income as dividends to shareholders. Chimera Investment Corporation was incorporated in 2007 and is headquartered in New York, New York.