Two Harbors Investments Corp (TWO) vs. Its Competitors Critical Comparison
Two Harbors Investments Corp (NYSE: TWO) is one of 44 publicly-traded companies in the “Residential REITs” industry, but how does it weigh in compared to its peers? We will compare Two Harbors Investments Corp to related companies based on the strength of its institutional ownership, valuation, earnings, analyst recommendations, dividends, risk and profitability.
Institutional and Insider Ownership
70.2% of Two Harbors Investments Corp shares are owned by institutional investors. Comparatively, 77.0% of shares of all “Residential REITs” companies are owned by institutional investors. 1.2% of Two Harbors Investments Corp shares are owned by company insiders. Comparatively, 7.1% of shares of all “Residential REITs” companies are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.
This table compares Two Harbors Investments Corp and its peers’ 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||18.29%||4.82%||1.92%|
Volatility & Risk
Two Harbors Investments Corp has a beta of 0.59, indicating that its stock price is 41% less volatile than the S&P 500. Comparatively, Two Harbors Investments Corp’s peers have a beta of 0.61, indicating that their average stock price is 39% less volatile than the S&P 500.
This is a summary of current ratings and recommmendations for Two Harbors Investments Corp and its peers, as provided 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||1338||1276||36||2.36|
Two Harbors Investments Corp presently has a consensus price target of $9.69, suggesting a potential downside of 4.93%. As a group, “Residential REITs” companies have a potential upside of 2.55%. Given Two Harbors Investments Corp’s peers higher possible upside, analysts clearly believe Two Harbors Investments Corp has less favorable growth aspects than its peers.
Two Harbors Investments Corp pays an annual dividend of $1.04 per share and has a dividend yield of 10.2%. 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 3.4% and pay out 119.1% of their earnings in the form of a dividend. Two Harbors Investments Corp is clearly a better dividend stock than its peers, given its higher yield and lower payout ratio.
Earnings & Valuation
This table compares Two Harbors Investments Corp and its peers revenue, earnings per share and valuation.
|Gross Revenue||EBITDA||Price/Earnings Ratio|
|Two Harbors Investments Corp||$664.12 million||N/A||7.13|
|Two Harbors Investments Corp Competitors||$702.65 million||$394.70 million||0.96|
Two Harbors Investments Corp’s peers 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 peers, indicating that it is currently more expensive than other companies in its industry.
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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