Two Harbors Investments Corp (TWO) and Its Competitors Financial Analysis
Two Harbors Investments Corp (NYSE: TWO) is one of 44 public companies in the “Residential REITs” industry, but how does it weigh in compared to its competitors? We will compare Two Harbors Investments Corp to related companies based on the strength of its earnings, dividends, profitability, institutional ownership, risk, analyst recommendations and valuation.
Insider & Institutional Ownership
70.2% of Two Harbors Investments Corp shares are owned by institutional investors. Comparatively, 77.3% of shares of all “Residential REITs” companies are owned by institutional investors. 1.2% of Two Harbors Investments Corp shares are owned by insiders. Comparatively, 7.1% of shares of all “Residential REITs” companies are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.
Earnings and Valuation
This table compares Two Harbors Investments Corp and its competitors top-line revenue, earnings per share and valuation.
|Gross Revenue||EBITDA||Price/Earnings Ratio|
|Two Harbors Investments Corp||$664.12 million||N/A||7.04|
|Two Harbors Investments Corp Competitors||$635.77 million||$353.96 million||1.04|
Two Harbors Investments Corp has higher revenue, but lower earnings than its competitors. Two Harbors Investments Corp is trading at a higher price-to-earnings ratio than its competitors, indicating that it is currently more expensive than other companies in its industry.
Volatility and Risk
Two Harbors Investments Corp has a beta of 0.59, indicating that its share price is 41% less volatile than the S&P 500. Comparatively, Two Harbors Investments Corp’s competitors have a beta of 0.61, indicating that their average share price is 39% less volatile than the S&P 500.
This is a summary of recent ratings and target prices for Two Harbors Investments Corp and its competitors, as reported by MarketBeat.com.
|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||1273||36||2.36|
Two Harbors Investments Corp presently has a consensus price target of $9.69, suggesting a potential downside of 3.80%. As a group, “Residential REITs” companies have a potential upside of 1.15%. Given Two Harbors Investments Corp’s competitors higher probable upside, analysts clearly believe Two Harbors Investments Corp has less favorable growth aspects than its competitors.
This table compares Two Harbors Investments Corp and its competitors’ 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||18.92%||5.16%||1.99%|
Two Harbors Investments Corp pays an annual dividend of $1.04 per share and has a dividend yield of 10.3%. 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 competitors, given its higher yield and lower payout ratio.
Two Harbors Investments Corp beats its competitors on 8 of the 14 factors compared.
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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