Is Chimera Investment Corporation (NYSE:CIM) the Best High-Dividend Penny Stock to Buy Now?

Dividend stocks have been gaining popularity, especially after major technology companies started offering dividends for the first time this year. With inflation concerns and expectations of a prolonged period of higher prices, Americans are turning to dividend-paying stocks. In this environment, affordable stocks that offer high dividends are drawing attention.

One such company that has caught the eye of hedge funds is Chimera Investment Corporation (NYSE:CIM), a prominent player in the REIT industry. With 18 hedge fund investors, Chimera Investment Corporation currently boasts a dividend yield of around 10% as of May 14. The company made headlines recently when its board of directors announced a reverse stock split at a ratio of 1-for-3, effective May 21.

During its latest earnings call, Chimera discussed its dividend and financial situation. The company reported an economic return on GAAP book value of 7% for the first quarter, with net income of $31 million or $0.12 per share. Chimera also provided details on its interest income, cost of funds, leverage, financing, and hedging strategies.

Wall Street analysts have set a 12-month price estimate of $5.25 for Chimera, while the stock was trading at around $4.48 on May 14. This suggests an upside potential of 17%. However, unlike larger companies like Johnson & Johnson, Procter & Gamble, and Exxon Mobil, Chimera Investment Corporation is a smaller company with lower hedge fund sentiment.

While Chimera Investment Corporation may seem like a strong high-dividend penny stock, Insider Monkey’s research indicates that there are 10 other high-dividend penny stocks that may be better investments. It’s important to conduct thorough research and consider all options before making investment decisions.