Two Harbors Investments (NYSE:TWO – Get Free Report) and AG Mortgage Investment Trust (NYSE:MITT – Get Free Report) are both small-cap finance companies, but which is the superior investment? We will compare the two companies based on the strength of their dividends, valuation, institutional ownership, risk, profitability, earnings and analyst recommendations.
Volatility & Risk
Two Harbors Investments has a beta of 1.19, suggesting that its stock price is 19% more volatile than the S&P 500. Comparatively, AG Mortgage Investment Trust has a beta of 1.69, suggesting that its stock price is 69% more volatile than the S&P 500.
Profitability
This table compares Two Harbors Investments and AG Mortgage Investment Trust’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Two Harbors Investments | -109.90% | 12.00% | 1.29% |
| AG Mortgage Investment Trust | 11.03% | 13.88% | 0.59% |
Valuation & Earnings
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Two Harbors Investments | $412.00 million | 3.02 | $298.17 million | ($4.89) | -2.44 |
| AG Mortgage Investment Trust | $408.49 million | 0.67 | $55.74 million | $0.93 | 9.29 |
Two Harbors Investments has higher revenue and earnings than AG Mortgage Investment Trust. Two Harbors Investments is trading at a lower price-to-earnings ratio than AG Mortgage Investment Trust, indicating that it is currently the more affordable of the two stocks.
Dividends
Two Harbors Investments pays an annual dividend of $1.36 per share and has a dividend yield of 11.4%. AG Mortgage Investment Trust pays an annual dividend of $0.92 per share and has a dividend yield of 10.6%. Two Harbors Investments pays out -27.8% of its earnings in the form of a dividend. AG Mortgage Investment Trust pays out 98.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Two Harbors Investments has increased its dividend for 1 consecutive years and AG Mortgage Investment Trust has increased its dividend for 2 consecutive years. Two Harbors Investments is clearly the better dividend stock, given its higher yield and lower payout ratio.
Analyst Ratings
This is a breakdown of recent recommendations for Two Harbors Investments and AG Mortgage Investment Trust, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Two Harbors Investments | 2 | 7 | 0 | 0 | 1.78 |
| AG Mortgage Investment Trust | 0 | 3 | 5 | 0 | 2.63 |
Two Harbors Investments presently has a consensus target price of $12.88, indicating a potential upside of 7.92%. AG Mortgage Investment Trust has a consensus target price of $9.17, indicating a potential upside of 6.10%. Given Two Harbors Investments’ higher possible upside, equities research analysts clearly believe Two Harbors Investments is more favorable than AG Mortgage Investment Trust.
Insider & Institutional Ownership
64.2% of Two Harbors Investments shares are owned by institutional investors. Comparatively, 27.3% of AG Mortgage Investment Trust shares are owned by institutional investors. 0.7% of Two Harbors Investments shares are owned by company insiders. Comparatively, 3.2% of AG Mortgage Investment Trust shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.
Summary
AG Mortgage Investment Trust beats Two Harbors Investments on 9 of the 17 factors compared between the two stocks.
About Two Harbors Investments
Two Harbors Investment Corp. invests in, finances, and manages mortgage servicing rights (MSRs), agency residential mortgage-backed securities (RMBS), and other financial assets through RoundPoint in the United States. The company target assets include agency RMBS collateralized by fixed rate mortgage loans, adjustable rate mortgage loans, hybrid mortgage loans, or derivatives; and other assets, such as financial and mortgage-related assets, including non-agency securities and non-hedging transactions. It qualifies as a REIT for federal income tax purposes. As a REIT, the company must distribute at least 90% of annual taxable income to its stockholders. Two Harbors Investment Corp. was incorporated in 2009 and is headquartered in St. Louis Park, Minnesota.
About AG Mortgage Investment Trust
AG Mortgage Investment Trust, Inc. operates as a residential mortgage real estate investment trust in the United States. Its investment portfolio includes residential investments, including non-agency loans, agency-eligible loans, re-and non-performing loans, and non-agency residential mortgage-backed securities, as well as commercial loans and commercial mortgage-backed securities. The company qualifies as a real estate investment trust for federal income tax purposes. It generally would not be subject to federal corporate income taxes if it distributes at least 90% of its taxable income to its stockholders. AG Mortgage Investment Trust, Inc. was incorporated in 2011 and is based in New York, New York.
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