Head-To-Head Analysis: Home Properties (HME) and Two Harbors Investments Corp (TWO)
Home Properties (NYSE: HME) and Two Harbors Investments Corp (NYSE:TWO) are both financials companies, but which is the better investment? We will compare the two businesses based on the strength of their analyst recommendations, risk, dividends, profitabiliy, earnings, institutional ownership and valuation.
Two Harbors Investments Corp pays an annual dividend of $1.00 per share and has a dividend yield of 9.6%. Home Properties does not pay a dividend. Two Harbors Investments Corp pays out 73.0% of its earnings in the form of a dividend. Home Properties has increased its dividend for 6 consecutive years.
Institutional and Insider Ownership
70.8% of Two Harbors Investments Corp shares are owned by institutional investors. 1.2% of Two Harbors Investments Corp shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.
Valuation and Earnings
This table compares Home Properties and Two Harbors Investments Corp’s revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Two Harbors Investments Corp||$639.60 million||5.66||$478.02 million||$1.37||7.57|
Two Harbors Investments Corp has higher revenue and earnings than Home Properties.
This is a summary of recent ratings for Home Properties and Two Harbors Investments Corp, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Two Harbors Investments Corp||0||3||6||0||2.67|
Two Harbors Investments Corp has a consensus target price of $9.57, suggesting a potential downside of 7.73%. Given Two Harbors Investments Corp’s higher probable upside, analysts clearly believe Two Harbors Investments Corp is more favorable than Home Properties.
This table compares Home Properties and Two Harbors Investments Corp’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Two Harbors Investments Corp||74.05%||9.81%||1.55%|
Two Harbors Investments Corp beats Home Properties on 8 of the 11 factors compared between the two stocks.
Home Properties Company Profile
Home Properties, Inc. (Home Properties) is a self-administered and self-managed real estate investment trust (REIT). The Company owns, operates, acquires and repositions apartment communities in suburbs of metropolitan areas, primarily along the East Coast of the United States. The Company conducts its business through Home Properties, L.P. (the Operating Partnership), and a management company, Home Properties Resident Services, Inc. (HPRS). As of December 31, 2014, the Company owned and operated 121 communities with 42,107 apartment units. The Company’s properties are two- and three-story garden style apartment buildings in landscaped settings and brick or other masonry construction. As of December 31, 2014, approximately 26.6%, 24.9%, 14.0%, 8.5% and 8.5% of the Company’s Properties are located in the Washington, D.C., Baltimore, Philadelphia, Long Island and Northern New Jersey markets, respectively.
Two Harbors Investments Corp Company Profile
Two Harbors Investment Corp. is a real estate investment trust. The Company is focused on investing in, financing and managing residential mortgage-backed securities (RMBS), mortgage servicing rights (MSR), commercial real estate and other financial assets (collectively known as target assets). Its investment objective is to provide attractive risk-adjusted total return to its stockholders over the long-term, primarily through dividends and secondarily through capital appreciation. The Company focuses on managing various associated risks, including interest rate, prepayment, credit, mortgage spread and financing risk. The Company finances its RMBS and commercial real estate assets through short- and long-term borrowings structured as repurchase agreements and advances from the Federal Home Loan Bank of Des Moines, or the FHLB. It also finances its MSR through revolving credit facilities.
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