NYSE:TWO

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

Very undervalued with limited growth.


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's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

-24.3%

TWO

-16.7%

US Mortgage REITs

-1.1%

US Market


1 Year Return

-74.6%

TWO

-60.6%

US Mortgage REITs

-13.6%

US Market

Return vs Industry: TWO underperformed the US Mortgage REITs industry which returned -56.2% over the past year.

Return vs Market: TWO underperformed the US Market which returned -10.7% over the past year.


Shareholder returns

TWOIndustryMarket
7 Day-24.3%-16.7%-1.1%
30 Day-75.3%-59.9%-17.8%
90 Day-76.5%-60.4%-22.5%
1 Year-72.2%-74.6%-55.9%-60.6%-11.9%-13.6%
3 Year-69.6%-82.1%-47.3%-62.2%12.1%4.9%
5 Year-65.8%-83.8%-35.4%-63.2%30.5%16.3%

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

Valuation

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

>50%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: TWO ($3.81) is trading below our estimate of fair value ($25.24)

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


Price To Earnings Ratio

PE vs Industry: TWO is good value based on its PE Ratio (4.1x) compared to the Mortgage REITs industry average (4.2x).

PE vs Market: TWO is good value based on its PE Ratio (4.1x) compared to the US market (13.1x).


Price to Earnings Growth Ratio

PEG Ratio: TWO is good value based on its PEG Ratio (0.3x)


Price to Book Ratio

PB vs Industry: TWO is good value based on its PB Ratio (0.3x) compared to the US Mortgage REITs industry average (0.4x).


Next Steps

Future Growth

How is Two Harbors Investment forecast to perform in the next 1 to 3 years based on estimates from 6 analysts?

14.9%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: TWO's forecast earnings growth (14.9% per year) is above the savings rate (1.7%).

Earnings vs Market: TWO's earnings (14.9% per year) are forecast to grow faster than the US market (12.3% per year).

High Growth Earnings: TWO's earnings are forecast to grow, but not significantly.

Revenue vs Market: TWO's revenue is expected to decline over the next 3 years (-82% per year).

High Growth Revenue: TWO's revenue is forecast to decline over the next 3 years (-82% per year).


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: TWO's Return on Equity is forecast to be low in 3 years time (10.1%).


Next Steps

Past Performance

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

-25.7%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: TWO has high quality earnings.

Growing Profit Margin: TWO became profitable in the past.


Past Earnings Growth Analysis

Earnings Trend: TWO's earnings have declined by -25.7% per year over the past 5 years.

Accelerating Growth: TWO has become profitable in the last year, making the earnings growth rate difficult to compare to its 5-year average.

Earnings vs Industry: TWO has become profitable in the last year, making it difficult to compare its past year earnings growth to the Mortgage REITs industry (18.1%).


Return on Equity

High ROE: TWO's Return on Equity (6.5%) is considered low.


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 has a low level of unsold assets or inventory.

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


Financial Institutions Analysis

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

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

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

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

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

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


Next Steps

Dividend

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

41.49%

Forecast Dividend Yield


Dividend Yield vs Market

Notable Dividend: Unable to evaluate TWO's dividend yield against the bottom 25% of dividend payers, as the company has not reported any payouts.

High Dividend: Unable to evaluate TWO's dividend yield against the top 25% of dividend payers, as the company has not reported any payouts.


Stability and Growth of Payments

Stable Dividend: Insufficient data to determine if TWO's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if TWO's dividend payments have been increasing.


Current Payout to Shareholders

Dividend Coverage: TWO is not paying a notable dividend for the US market.


Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of TWO's dividend in 3 years as they are not forecast to pay a notable one for the US market.


Next Steps

Management

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

2.4yrs

Average management tenure


CEO

Tom Siering (59yo)

10.5s

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 ...


Leadership Team

NamePositionTenureCompensationOwnership
Thomas Siering
CEO, President & Director10.5yrsUS$3.83m0.41% $3.8m
Mary Riskey
VP & CFO1.5yrsUS$295.69k0.041% $387.4k
Rebecca Sandberg
VP, General Counsel & Secretary7.08yrsUS$835.80k0.077% $728.4k
Matthew Koeppen
VP & Co-Chief Investment Officer0.25yrno data0.062% $584.6k
William Greenberg
VP & Co-Chief Investment Officer0.25yrno data0.068% $646.2k
Matt Keen
MD & CTO0.25yrno datano data
Alecia Hanson
Managing Director of Human Resources1.25yrsno datano data
Victor Baev
Managing Director7.25yrsno datano data
Robert Rush
MD & Chief Risk Officer6.58yrsno datano data
Jason Vinar
Managing Director3.25yrsno datano data

2.4yrs

Average Tenure

51yo

Average Age

Experienced Management: TWO's management team is considered experienced (2.4 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Thomas Siering
CEO, President & Director10.5yrsUS$3.83m0.41% $3.8m
Stephen Kasnet
Independent Chairman of the Boardno dataUS$249.99k0.031% $295.9k
James Bender
Independent Director6.92yrsUS$199.99k0.012% $111.5k
James Stern
Independent Director1.75yrsUS$114.34k0.031% $293.4k
William Sanders
Independent Director10.5yrsUS$199.99k0.030% $286.2k
E. Abraham
Independent Director5.92yrsUS$199.99k0.010% $98.2k
Hope Woodhouse
Independent Director7.92yrsUS$199.99k0.016% $150.6k
Karen Hammond
Independent Director1.75yrsUS$114.34k0.017% $163.0k

6.9yrs

Average Tenure

64.5yo

Average Age

Experienced Board: TWO's board of directors are considered experienced (6.9 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.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 30%.


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
  • Exchange: NYSE
  • Founded: 2009
  • Industry: Mortgage REITs
  • Sector: Diversified Financials
  • Market Cap: US$944.014m
  • Shares outstanding: 273.63m
  • 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, 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, and hybrid adjustable-rate mortgage (ARMs); 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 Analysis2020/04/02 09:32
End of Day Share Price2020/04/01 00:00
Earnings2019/12/31
Annual Earnings2019/12/31


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.