NYSE:TWO.PRC

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.


Snowflake Analysis

Undervalued second-rate dividend payer.


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: TWO.PRC has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

1.2%

TWO.PRC

-9.4%

US Mortgage REITs

-10.6%

US Market


1 Year Return

n/a

TWO.PRC

-2.3%

US Mortgage REITs

5.2%

US Market

Return vs Industry: Insufficient data to determine how TWO.PRC performed against the US Mortgage REITs industry.

Return vs Market: Insufficient data to determine how TWO.PRC performed against the US Market.


Shareholder returns

TWO.PRCIndustryMarket
7 Day1.2%-9.4%-10.6%
30 Day-2.6%-6.7%-8.5%
90 Dayn/a-2.1%-4.6%
1 Yearn/a8.3%-2.3%7.4%5.2%
3 Yearn/a30.6%-5.6%31.7%23.2%
5 Yearn/a60.1%-8.1%56.4%39.3%

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?

44.2%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: TWO.PRC ($24.02) is trading below our estimate of fair value ($43.03)

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


Price To Earnings Ratio

PE vs Industry: TWO.PRC is good value based on its PE Ratio (3.7x) compared to the Mortgage REITs industry average (13.7x).

PE vs Market: TWO.PRC is good value based on its PE Ratio (3.7x) compared to the US market (18.9x).


Price to Earnings Growth Ratio

PEG Ratio: TWO.PRC's earnings are forecast to decline next year, so we can't calculate its PEG ratio.


Price to Book Ratio

PB vs Industry: TWO.PRC is good value based on its PB Ratio (0.9x) compared to the US 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 4 analysts?

-12.9%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: TWO.PRC's earnings are forecast to decline over the next 3 years (-12.9% per year).

Earnings vs Market: TWO.PRC's earnings are forecast to decline over the next 3 years (-12.9% per year).

High Growth Earnings: TWO.PRC's earnings are forecast to decline over the next 3 years.

Revenue vs Market: TWO.PRC's revenue is expected to decline over the next 3 years (-0.02% per year).

High Growth Revenue: TWO.PRC's revenue is forecast to decline over the next 3 years (-0.02% per year).


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: TWO.PRC'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?

-0.1%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: Insufficient data to determine if TWO.PRC has high quality earnings.

Growing Profit Margin: Insufficient data to determine if TWO.PRC's profit margins have improved over the past year.


Past Earnings Growth Analysis

Earnings Trend: TWO.PRC's earnings have declined by -0.1% per year over the past 5 years.

Accelerating Growth: TWO.PRC's earnings growth over the past year (44.2%) exceeds its 5-year average (-0.1% per year).

Earnings vs Industry: TWO.PRC earnings growth over the past year (44.2%) exceeded the Mortgage REITs industry 0.1%.


Return on Equity

High ROE: Whilst TWO.PRC's Return on Equity (20.96%) is high, this metric is skewed due to their high level of debt.


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: TWO.PRC has a low level of unsold assets or inventory.

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


Financial Institutions Analysis

Asset Level: TWO.PRC's level of assets compared to its equity is low.

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

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

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

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

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


Next Steps

Dividend

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

13.73%

Current Dividend Yield


Dividend Yield vs Market

company13.7%marketbottom25%1.6%markettop25%4.1%industryaverage10.3%forecastin3Years13.0%

Current dividend yield vs market & industry

Notable Dividend: TWO.PRC's dividend (13.73%) is higher than the bottom 25% of dividend payers in the US market (1.4%).

High Dividend: TWO.PRC's dividend (13.73%) is in the top 25% of dividend payers in the US market (3.66%)


Stability and Growth of Payments

Stable Dividend: TWO.PRC has been paying a dividend for less than 10 years and during this time payments have been volatile.

Growing Dividend: TWO.PRC has only been paying a dividend for 9 years, and since then payments have fallen.


Current Payout to Shareholders

Dividend Coverage: With its reasonably low payout ratio (49.6%), TWO.PRC's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: TWO.PRC's dividends in 3 years are not forecast to be well covered by earnings (98.3% payout ratio).


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

5.8yrs

Average management tenure


CEO

Tom Siering (58yo)

9yrs

Tenure

US$4,139,161

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 ...


CEO Compensation Analysis

Compensation vs Market: Tom's total compensation ($USD4.14M) is about average for companies of similar size in the US market ($USD4.99M).

Compensation vs Earnings: Tom's compensation has increased by more than 20% in the past year.


Leadership Team

NamePositionTenureCompensationOwnership
Thomas Siering
President9yrsUS$4.14mno data
William Roth
Chief Investment Officer & Director3.4yrsUS$4.14mno data
Rebecca Sandberg
VP, General Counsel & Secretary5.6yrsUS$835.56kno data
Brad Farrell
Executive Officer0yrsUS$1.82mno data
Mary Riskey
MD, Chief Accounting Officer0yrsno datano data
Matthew Koeppen
MD & Co-Deputy Chief Investment Officer5.9yrsno datano data
William Greenberg
MD & Co-Deputy Chief Investment Officer5.9yrsno datano data
Victor Baev
Managing Director5.8yrsno datano data
Robert Rush
MD & Chief Risk Officer5.1yrsno datano data
Jeffrey Hurley
Managing Director3.2yrsno datano data

5.8yrs

Average Tenure

54yo

Average Age

Experienced Management: TWO.PRC's management team is seasoned and experienced (5.8 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Thomas Siering
President9yrsUS$4.14mno data
William Roth
Chief Investment Officer & Director3.4yrsUS$4.14mno data
Stephen Kasnet
Non-Executive Vice Chairman3.4yrsUS$299.99kno data
James Bender
Independent Director5.4yrsUS$199.99kno data
James Stern
Independent Director0.3yrsno datano data
William Sanders
Independent Director9yrsUS$249.99kno data
E. Abraham
Independent Director4.4yrsUS$199.99kno data
Brian Taylor
Chairman of the Board9yrsno datano data
Hope Woodhouse
Independent Director6.4yrsUS$249.99kno data
Karen Hammond
Independent Director0.3yrsno datano data

4.9yrs

Average Tenure

61.5yo

Average Age

Experienced Board: TWO.PRC's board of directors are considered experienced (4.9 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Ownership Breakdown

Dilution of Shares: Insufficient data to determine if shareholders have been diluted in the past year.


Top Shareholders

Company Information

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


Key Information

  • Name: Two Harbors Investment Corp.
  • Ticker: TWO.PRC
  • Exchange: NYSE
  • Founded: 2009
  • Industry: Mortgage REITs
  • Sector: Diversified Financials
  • Market Cap: US$3.562b
  • Shares outstanding: 248.07m
  • 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
2H2AMUN (Boerse Muenchen)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.PRCNYSE (New York Stock Exchange)7.25% CUM PFD CUSUSDNov 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, mortgage servicing rights, and other financial assets in the United States. Its target assets include agency RMBS collateralized by fixed rate mortgage loans, adjustable rate mortgage loans, hybrid mortgage loans, or derivatives; non-agency securities collateralized by prime mortgage loans, Alt-A mortgage loans, pay-option ARM loans, and subprime mortgage loans; and other assets, such as financial and mortgage-related assets, as well as residential mortgage loans and non-hedging transactions. The company qualifies as a REIT for federal income tax purposes. As a REIT, the company would not be subject to federal income tax, if it distributes at least 90% of net taxable income to its stockholders. Two Harbors Investment Corp. was incorporated in 2009 and is headquartered in New York, New York. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2018/10/24 21:39
End of Day Share Price2018/10/24 00:00
Earnings2018/06/30
Annual Earnings2017/12/31


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.