Cherry Hill Mortgage Investment Corporation Announces Taxable Composition of 2023 Dividends
Cherry Hill Mortgage Investment Corporation (CHMI) announced the estimated Federal income tax treatment of the Company’s 2023 distributions on its common and preferred stock, totaling $0.8400 and $2.0500 respectively. The 8.20% Series A Cumulative Redeemable Preferred Stock and 8.250% Series B Fixed-to-Floating Rate Cumulative Redeemable Preferred Stock distributions were also detailed.
From a tax perspective, the classification of distributions is crucial for shareholders. The distinction between ordinary dividends and nondividend distributions impacts how these are taxed. Ordinary dividends are typically taxed at the individual's income tax rate, while nondividend distributions may be a return of capital and could alter the cost basis of the investment, potentially deferring taxes until the sale of the stock.
The announcement specifies the portion of the distributions classified as ordinary dividends, which are sizable in comparison to the nondividend distributions. This suggests that the majority of the payouts will be subject to ordinary income tax, which is significant for shareholders' after-tax return calculations. Additionally, the absence of nondividend distributions for preferred stock indicates a steady stream of taxable income for those shareholders.
When analyzing the financial health of Cherry Hill Mortgage Investment Corporation, the consistency and size of the distributions are telling. The common stock has experienced a decrease in distributions per share from the first half of the year to the second, which could signal a strategic shift or a response to changing market conditions. This could affect investor sentiment and the company's stock price.
For the preferred stock, the distributions have remained consistent, reflecting the company's commitment to fulfilling its obligations to preferred shareholders. The yield percentages provided, 8.20% for Series A and 8.250% for Series B, are competitive and could attract income-focused investors, potentially increasing demand for these securities in the market.
The distribution announcement provides insights into the company's capital allocation strategy. The maintained distributions for preferred stock, despite the reduced common stock distributions, suggest a prioritization of the former, which could be due to contractual obligations or a strategic decision to maintain investor confidence in these instruments. The market's response to this allocation will depend on the perceived stability of the company's earnings and the overall sector performance.
Understanding the company's distribution trends is critical for investors, as it reflects both the company's performance and market expectations. A reduction in common stock distributions could be interpreted as a red flag, prompting a deeper analysis of the company's operational efficiency and financial stability.
01/22/2024 - 04:15 PM
FARMINGDALE, N.J. --(BUSINESS WIRE)--
Cherry Hill Mortgage Investment Corporation (the “Company” or “CHMI”) (NYSE: CHMI) today announced the estimated Federal income tax treatment of the Company’s 2023 distributions on its common and preferred stock, as described below. Shareholders are encouraged to consult with their personal tax advisors as to their specific tax treatment of the Company’s distributions.
Common Stock
Total
Record
Payable
Distributions
Total Ordinary
Nondividend
Date
Date
Per Share
Dividends
Distributions
12/30/2022
01/31/2023
$0.27 00
$0.25 65
$0.01 35
03/31/2023
04/25/2023
$0.27 00
$0.25 65
$0.01 35
06/30/2023
07/31/2023
$0.15 00
$0.14 25
$0.00 75
09/29/2023
10/31/2023
$0.15 00
$0.14 25
$0.00 75
Total
$0.84 00
$0.79 80
$0.04 20
8.20% Series A Cumulative Redeemable Preferred Stock
Total
Record
Payable
Distributions
Total Ordinary
Nondividend
Date
Date
Per Share
Dividends
Distributions
12/30/2022
01/17/2023
$0.51 25
$0.51 25
-
03/31/2023
04/17/2023
$0.51 25
$0.51 25
-
06/30/2023
07/17/2023
$0.51 25
$0.51 25
-
09/29/2023
10/16/2023
$0.51 25
$0.51 25
-
Total
$2.05 00
$2.05 00
-
8.250% Series B Fixed-to-Floating Rate Cumulative Redeemable Preferred Stock
Total
Record
Payable
Distributions
Total Ordinary
Nondividend
Date
Date
Per Share
Dividends
Distributions
12/30/2022
01/17/2023
$0.51 56
$0.51 56
-
03/31/2023
04/17/2023
$0.51 56
$0.51 56
-
06/30/2023
07/17/2023
$0.51 56
$0.51 56
-
09/29/2023
10/16/2023
$0.51 56
$0.51 56
-
Total
$2.06 25
$2.06 25
-
About Cherry Hill Mortgage Investment Corporation
Cherry Hill Mortgage Investment Corporation is a real estate finance company that acquires, invests in and manages residential mortgage assets in the United States . For additional information, visit www.chmireit.com .
Forward-Looking Statements
This press release contains forward looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and other federal securities laws, including, among others, statements relating to the Company’s estimated Federal income tax treatment of the Company’s 2023 distributions on its common and preferred stock, long-term growth opportunities and strategies, and its ability to generate sustainable and attractive risk-adjusted returns for stockholders. These forward looking statements are based upon the Company’s present expectations, estimates and assumptions, but these statements are not guaranteed to occur. The actual Federal income tax treatment of the Company’s 2022 distributions could differ from estimated amounts. For a description of factors that may cause the Company's actual results or performance to differ from its forward-looking statements, please review the information under the heading “Risk Factors” included in the Company's Annual Report on Form 10-K for the year ended December 31, 2022, and other documents filed by the Company with the Securities and Exchange Commission.
View source version on businesswire.com: https://www.businesswire.com/news/home/20240122726904/en/
Cherry Hill Mortgage Investment Corporation
InvestorRelations@CHMIreit.com
Source: Cherry Hill Mortgage Investment Corporation
What is the estimated Federal income tax treatment announced by Cherry Hill Mortgage Investment Corporation (CHMI)?
The estimated Federal income tax treatment of the Company’s 2023 distributions on its common and preferred stock was announced by Cherry Hill Mortgage Investment Corporation (CHMI).
What is the total amount of distributions for common stock announced by Cherry Hill Mortgage Investment Corporation (CHMI)?
The total amount of distributions for common stock announced by Cherry Hill Mortgage Investment Corporation (CHMI) is $0.8400.
What is the total amount of distributions for 8.20% Series A Cumulative Redeemable Preferred Stock announced by Cherry Hill Mortgage Investment Corporation (CHMI)?
The total amount of distributions for 8.20% Series A Cumulative Redeemable Preferred Stock announced by Cherry Hill Mortgage Investment Corporation (CHMI) is $2.0500.
