CHMI-B preferred shares have a high-risk rating of 5, making them unsuitable for long-term investments. Despite their attractive yield of 10.7%, the shares are overpriced due to significant risk. The common equity to preferred liquidation ratio is 0.97, indicating substantial downside risk.
A closer look at the current market conditions reveals a low spread between junk bonds and Treasuries, making caution essential when investing in CHMI-B. Investors should explore alternative options with better risk-to-reward ratios.
In this article, we’ll analyze CHMI-B preferred shares and provide insights for investors looking to diversify their portfolios.
Source: https://seekingalpha.com/article