DB:2H2A

Stock Analysis Report

Executive Summary

Two Harbors Investment Corp. operates as a real estate investment trust (REIT) that focuses on investing in, financing, and managing residential mortgage-backed securities (RMBS), non-agency securities, mortgage servicing rights, and other financial assets in the United States.

Rewards

Trading at 27.5% below its fair value

Earnings are forecast to grow 55.15% per year

Risk Analysis

Dividend of 10.88% is not well covered by earnings or forecast to be in the next 3 years

Shareholders have been diluted in the past year



Snowflake Analysis

Moderate growth potential and slightly overvalued.


Similar Companies

Share Price & News

How has Two Harbors Investment's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: 2H2A has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

-0.8%

2H2A

-0.3%

DE Mortgage REITs

1.0%

DE Market


1 Year Return

5.3%

2H2A

0.8%

DE Mortgage REITs

14.2%

DE Market

Return vs Industry: 2H2A exceeded the German Mortgage REITs industry which returned 0.8% over the past year.

Return vs Market: 2H2A underperformed the German Market which returned 14.2% over the past year.


Shareholder returns

2H2AIndustryMarket
7 Day-0.8%-0.3%1.0%
30 Day1.5%1.5%0.04%
90 Day9.8%4.2%6.0%
1 Year20.2%5.3%12.0%0.8%17.8%14.2%
3 Year10.7%-22.6%42.6%2.9%19.2%8.7%
5 Year40.6%-20.8%57.6%-9.4%36.0%17.5%

Price Volatility Vs. Market

How volatile is Two Harbors Investment's share price compared to the market and industry in the last 5 years?


Simply Wall St News

No news available

Valuation

Is Two Harbors Investment undervalued compared to its fair value and its price relative to the market?

27.5%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: 2H2A (€13.2) is trading below our estimate of fair value (€18.21)

Significantly Below Fair Value: 2H2A is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: 2H2A is unprofitable, so we can't compare its PE Ratio to the Mortgage REITs industry average.

PE vs Market: 2H2A is unprofitable, so we can't compare its PE Ratio to the German market.


Price to Earnings Growth Ratio

PEG Ratio: Insufficient data to calculate 2H2A's PEG Ratio to determine if it is good value.


Price to Book Ratio

PB vs Industry: 2H2A is overvalued based on its PB Ratio (1x) compared to the XX Mortgage REITs industry average (1x).


Next Steps

Future Growth

How is Two Harbors Investment forecast to perform in the next 1 to 3 years based on estimates from 8 analysts?

55.1%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: 2H2A is forecast to become profitable over the next 3 years, which is considered faster growth than the savings rate (-0.4%).

Earnings vs Market: 2H2A is forecast to become profitable over the next 3 years, which is considered above average market growth.

High Growth Earnings: 2H2A's is expected to become profitable in the next 3 years.

Revenue vs Market: 2H2A's revenue is expected to decline over the next 3 years (-13.4% per year).

High Growth Revenue: 2H2A's revenue is forecast to decline over the next 3 years (-13.4% per year).


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: 2H2A's Return on Equity is forecast to be low in 3 years time (10.9%).


Next Steps

Past Performance

How has Two Harbors Investment performed over the past 5 years?

-28.5%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: 2H2A is currently unprofitable.

Growing Profit Margin: 2H2A is currently unprofitable.


Past Earnings Growth Analysis

Earnings Trend: 2H2A is unprofitable, and losses have increased over the past 5 years at a rate of -28.5% per year.

Accelerating Growth: Unable to compare 2H2A's earnings growth over the past year to its 5-year average as it is currently unprofitable

Earnings vs Industry: 2H2A is unprofitable, making it difficult to compare its past year earnings growth to the Mortgage REITs industry (-0.9%).


Return on Equity

High ROE: 2H2A has a negative Return on Equity (-7.28%), as it is currently unprofitable.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Two Harbors Investment's financial position? (This company is analysed differently as a bank or financial institution)


Financial Position Analysis


Debt to Equity History and Analysis


Balance Sheet

Inventory Level: 2H2A has a low level of unsold assets or inventory.

Debt Coverage by Assets: 2H2A's debt is not covered by short term assets (assets are 0.1x debt).


Financial Institutions Analysis

Asset Level: 2H2A's level of assets compared to its equity is low.

Allowance for Bad Loans: Insufficient data to determine if 2H2A has a sufficient allowance for bad loans.

Low Risk Liabilities: 2H2A reports no customer deposits, loans are made up entirely of externally borrowed funds.

Loan Level: Insufficient data to determine if 2H2A has an acceptable proportion of non-loan assets held.

Low Risk Deposits: 2H2A has advanced significantly more loans than the customer deposits it holds.

Level of Bad Loans: Insufficient data to determine if 2H2A has an appropriate level of bad loans.


Next Steps

Dividend

What is Two Harbors Investment's current dividend yield, its reliability and sustainability?

10.88%

Current Dividend Yield


Dividend Yield vs Market

company10.9%marketbottom25%1.3%markettop25%3.6%industryaverage10.0%forecastin3Years11.2%

Current dividend yield vs market & industry

Notable Dividend: 2H2A's dividend (10.88%) is higher than the bottom 25% of dividend payers in the German market (1.33%).

High Dividend: 2H2A's dividend (10.88%) is in the top 25% of dividend payers in the German market (3.58%)


Stability and Growth of Payments

Stable Dividend: 2H2A's dividend payments have been volatile in the past 10 years.

Growing Dividend: 2H2A's dividend payments have fallen over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: 2H2A is paying a dividend but the company is unprofitable.


Future Payout to Shareholders

Future Dividend Coverage: 2H2A's dividends in 3 years are not forecast to be well covered by earnings (95.7% payout ratio).


Next Steps

Management

What is the CEO of Two Harbors Investment's salary, the management and board of directors tenure and is there insider trading?

6.8yrs

Average management tenure


CEO

Tom Siering (59yo)

10.2yrs

Tenure

US$3,831,581

Compensation

Mr. Thomas Edwin Siering, also known as Tom, has been the Chief Executive Officer and President at Two Harbors Investment Corp. since May 2009. Mr. Siering serves as the Chief Executive Officer at TH TRS C ...


Management Age and Tenure

6.8yrs

Average Tenure

57yo

Average Age

Experienced Management: 2H2A's management team is seasoned and experienced (6.8 years average tenure).


Board Age and Tenure

6.1yrs

Average Tenure

63yo

Average Age

Experienced Board: 2H2A's board of directors are considered experienced (6.1 years average tenure).


Insider Trading

Insider Buying: 2H2A insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Buy€52,37313 Nov 19
Thomas Siering
EntityIndividual
Role
Chief Executive Officer
CEO, President & Director
Shares4,000
Max Price€13.09
Buy€67,17022 Aug 19
Karen Hammond
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares5,600
Max Price€11.99
Buy€58,82215 Aug 19
Thomas Siering
EntityIndividual
Role
Chief Executive Officer
CEO, President & Director
Shares5,000
Max Price€11.76
Buy€42,50421 Feb 19
Thomas Siering
EntityIndividual
Role
Chief Executive Officer
CEO, President & Director
Shares3,500
Max Price€12.14

Ownership Breakdown

Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 39.6%.


Management Team

  • Tom Siering (59yo)

    CEO, President & Director

    • Tenure: 10.2yrs
    • Compensation: US$3.83m
  • Bill Roth (62yo)

    Chief Investment Officer & Director

    • Tenure: 4.6yrs
    • Compensation: US$2.03m
  • Victor Baev

    Managing Director

    • Tenure: 6.9yrs
  • Rebecca Sandberg (47yo)

    VP, General Counsel & Secretary

    • Tenure: 6.8yrs
    • Compensation: US$835.80k
  • Matt Koeppen

    MD & Co-Deputy Chief Investment Officer

    • Tenure: 7.1yrs
  • Bill Greenberg

    MD & Co-Deputy Chief Investment Officer

    • Tenure: 7.1yrs
  • Bob Rush

    MD & Chief Risk Officer

    • Tenure: 6.3yrs
  • Jeffrey Hurley

    Managing Director

    • Tenure: 4.3yrs
  • Mary Riskey (55yo)

    VP, CFO & Chief Accounting Officer

    • Tenure: 1.2yrs
    • Compensation: US$295.69k
  • Alecia Hanson

    Managing Director of Human Resources

    • Tenure: 0.9yrs

Board Members

  • Steven, Steve Kasnet (73yo)

    Independent Chairman of the Board

    • Tenure: 0yrs
    • Compensation: US$249.99k
  • Jim Bender (62yo)

    Independent Director

    • Tenure: 6.6yrs
    • Compensation: US$199.99k
  • Jim Stern (68yo)

    Independent Director

    • Tenure: 1.4yrs
    • Compensation: US$114.34k
  • William Sanders (69yo)

    Independent Director

    • Tenure: 10.2yrs
    • Compensation: US$199.99k
  • E. Abraham (66yo)

    Independent Director

    • Tenure: 5.6yrs
    • Compensation: US$199.99k
  • Hope Woodhouse (62yo)

    Independent Director

    • Tenure: 7.6yrs
    • Compensation: US$199.99k
  • Tom Siering (59yo)

    CEO, President & Director

    • Tenure: 10.2yrs
    • Compensation: US$3.83m
  • Bill Roth (62yo)

    Chief Investment Officer & Director

    • Tenure: 4.6yrs
    • Compensation: US$2.03m
  • Karen Hammond (63yo)

    Independent Director

    • Tenure: 1.4yrs
    • Compensation: US$114.34k

Company Information

Two Harbors Investment Corp.'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Two Harbors Investment Corp.
  • Ticker: 2H2A
  • Exchange: DB
  • Founded: 2009
  • Industry: Mortgage REITs
  • Sector: Diversified Financials
  • Market Cap: US$4.012b
  • Listing Market Cap: US$3.606b
  • Shares outstanding: 272.90m
  • Website: https://www.twoharborsinvestment.com

Location

  • Two Harbors Investment Corp.
  • 575 Lexington Avenue
  • Suite 2930
  • New York
  • New York
  • 10022
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
TWONYSE (New York Stock Exchange)YesCommon StockUSUSDOct 2009
2H2ADB (Deutsche Boerse AG)YesCommon StockDEEUROct 2009
TWO.PRANYSE (New York Stock Exchange)PFD SER AUSUSDMar 2017
TWO.PRBNYSE (New York Stock Exchange)7.625% PFD B FXDUSUSDJul 2017
TWO.PRENYSE (New York Stock Exchange)7.50% CM PFD EUSUSDAug 2018
TWO.PRDNYSE (New York Stock Exchange)7.75% CM PFD DUSUSDAug 2018

Biography

Two Harbors Investment Corp. operates as a real estate investment trust (REIT) that focuses on investing in, financing, and managing residential mortgage-backed securities (RMBS), non-agency securities, mo ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/12/13 21:42
End of Day Share Price2019/12/13 00:00
Earnings2019/09/30
Annual Earnings2018/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.