10.4% Dividend Yield Worth Considering From Chimera Investment

Chimera Investment Corporation preferred C shares offer a 10.39% floating yield, trading at 97.8% of our buy target. CIM-C presents a more attractive valuation and higher yield than CIM-A, despite both carrying a risk rating of 4. CIM-A trades above our buy target and offers a lower yield (9.74%), making it less compelling versus CIM-C for income-focused investors. We maintain a buy rating on CIM-C, emphasizing its favorable yield-to-valuation profile within the mortgage REIT preferred share landscape.

Chimera Investment Corporation ( CIM ) has several preferred shares. Today, we are mainly focusing on Chimera Investment Corporation 7.75% CUM PFD C ( CIM.PR.C ). CIM-C currently offers investors a floating yield around 10.39%. That should be enough to get investors to pay attention. It’s also very interesting to compare CIM-C with Chimera Investment Corporation PFD SER A ( CIM.PR.A ). CIM-A currently offers a yield around 9.74%. So investors have a choice to make. They can get a materially higher yield from CIM-C. Or, they can buy CIM-A, which has a lower share price. However, don’t confuse a lower share price with a cheaper valuation. CIM-A trades at 105.6% of our buy target, while CIM-C is in our buy range by a nice margin.

CIM-C is trading around $22.01. At that price, shares are around 97.8% of our buy target. We like the valuation enough to be currently invested in it. As you can see in the image above, we own shares. CIM-C is about 1.53% of our portfolio. The preferred share does come with a risk rating of 4. That's a significantly higher risk rating than what we assign to the preferred shares from mortgage REITs like Annaly Capital Management, Inc. ( NLY ) or AGNC Investment Corp. ( AGNC ). Consequently, investors should demand a higher yield from CIM-C.

CIM-C switched to a floating rate on September 30, 2025. The floating rate has a spread of 4.743%. At the current share price, CIM-C has a floating yield on price around 10.39%. That's a pretty good yield. We don't need to pay over the call value of $25 here to get a yield over 10%. Investors are getting paid more because they're taking on more risk (see the risk rating of 4). Let’s have some fun and compare that risk with another preferred share from the same company. This is where things get interesting.

CIM-A is currently trading around $20.62. On the plus side, that’s a lower share price than CIM-C, which may confuse some investors into thinking it’s a great deal. It isn't. CIM-A is currently around 105.6% of our buy target. I’ll point out the obvious: that’s significantly over our buy range. Meanwhile, CIM-C is around 97.8% of our buy target. That's a massive difference in relative valuation. CIM-A offers a yield around 9.74%, while CIM-C offers a yield around 10.39%. Same company. Same risk rating. Lower yield. Higher relative valuation. What a fantastic deal. For the seller.

If short-term rates decline, the dividend rate on CIM-C will decline as well. That’s a legitimate reason for investors to look for a fixed rate if they want to lock in their income. However, a fixed rate isn't valuable at any price. We understand why investors might pay a premium to lock a dividend rate. We just don't think locking in less income is a premium feature.

We spend a great deal of time comparing preferred shares at The REIT Forum . That's particularly important because shares from the same company can occasionally trade at dramatically different relative valuations. CIM-C and CIM-A are giving us a pretty good example today.