Two Harbors Investments Corp (NYSE: TWO) is one of 43 publicly-traded companies in the “Residential REITs” industry, but how does it compare to its rivals? We will compare Two Harbors Investments Corp to similar companies based on the strength of its dividends, risk, earnings, institutional ownership, valuation, analyst recommendations and profitability.

Dividends

Two Harbors Investments Corp pays an annual dividend of $1.04 per share and has a dividend yield of 10.4%. Two Harbors Investments Corp pays out 72.7% of its earnings in the form of a dividend. As a group, “Residential REITs” companies pay a dividend yield of 3.3% and pay out 119.7% of their earnings in the form of a dividend. Two Harbors Investments Corp is clearly a better dividend stock than its rivals, given its higher yield and lower payout ratio.

Profitability

This table compares Two Harbors Investments Corp and its rivals’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Two Harbors Investments Corp 72.15% 10.26% 1.60%
Two Harbors Investments Corp Competitors 17.27% 5.14% 1.93%

Risk & Volatility

Two Harbors Investments Corp has a beta of 0.59, suggesting that its stock price is 41% less volatile than the S&P 500. Comparatively, Two Harbors Investments Corp’s rivals have a beta of 0.61, suggesting that their average stock price is 39% less volatile than the S&P 500.

Insider and Institutional Ownership

70.2% of Two Harbors Investments Corp shares are held by institutional investors. Comparatively, 77.9% of shares of all “Residential REITs” companies are held by institutional investors. 1.2% of Two Harbors Investments Corp shares are held by company insiders. Comparatively, 7.1% of shares of all “Residential REITs” companies are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Valuation & Earnings

This table compares Two Harbors Investments Corp and its rivals gross revenue, earnings per share (EPS) and valuation.

Gross Revenue EBITDA Price/Earnings Ratio
Two Harbors Investments Corp $664.12 million N/A 7.02
Two Harbors Investments Corp Competitors $702.65 million $394.70 million 0.58

Two Harbors Investments Corp’s rivals have higher revenue and earnings than Two Harbors Investments Corp. Two Harbors Investments Corp is trading at a higher price-to-earnings ratio than its rivals, indicating that it is currently more expensive than other companies in its industry.

Analyst Ratings

This is a breakdown of current ratings and target prices for Two Harbors Investments Corp and its rivals, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Two Harbors Investments Corp 0 2 3 0 2.60
Two Harbors Investments Corp Competitors 288 1334 1270 36 2.36

Two Harbors Investments Corp presently has a consensus price target of $9.69, suggesting a potential downside of 3.51%. As a group, “Residential REITs” companies have a potential upside of 1.44%. Given Two Harbors Investments Corp’s rivals higher possible upside, analysts plainly believe Two Harbors Investments Corp has less favorable growth aspects than its rivals.

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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