TWO HARBORS INVESTMENT CORP (TWO)
US90187B8046 - REIT
Taking everything into account, TWO scores 4 out of 10 in our fundamental rating. TWO was compared to 65 industry peers in the Mortgage Real Estate Investment Trusts (REITs)" industry. There are concerns on the financial health of TWO while its profitability can be described as average. TWO is not valued too expensively and it also shows a decent growth rate.
1. Profitability
1.1 Basic Checks
TWO had negative earnings in the past year.
TWO had a positive operating cash flow in the past year.
In multiple years TWO reported negative net income over the last 5 years.
TWO had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
TWO has a Return On Assets of 1.73%. This is in the better half of the industry: TWO outperforms 70.77% of its industry peers.
With an excellent Return On Equity value of 10.19%, TWO belongs to the best of the industry, outperforming 86.15% of the companies in the same industry.
The Return On Invested Capital of TWO (1.79%) is better than 75.38% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 1.73% | ||
| ROE | 10.19% | ||
| ROIC | 1.79% |
ROA(3y)0.42%
ROA(5y)-1.36%
ROE(3y)2.07%
ROE(5y)-8.8%
ROIC(3y)N/A
ROIC(5y)N/A
1.3 Margins
TWO has a better Profit Margin (19.26%) than 84.62% of its industry peers.
With an excellent Operating Margin value of 28.23%, TWO belongs to the best of the industry, outperforming 87.69% of the companies in the same industry.
The Gross Margin of TWO (38.02%) is comparable to the rest of the industry.
In the last couple of years the Gross Margin of TWO has declined.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 28.23% | ||
| PM (TTM) | 19.26% | ||
| GM | 38.02% |
OM growth 3YN/A
OM growth 5YN/A
PM growth 3YN/A
PM growth 5YN/A
GM growth 3Y-68.99%
GM growth 5Y-27.55%
2. Health
2.1 Basic Checks
TWO has more shares outstanding than it did 1 year ago.
Compared to 5 years ago, TWO has more shares outstanding
TWO has a better debt/assets ratio than last year.
2.2 Solvency
TWO has an Altman-Z score of -0.87. This is a bad value and indicates that TWO is not financially healthy and even has some risk of bankruptcy.
With a Altman-Z score value of -0.87, TWO is not doing good in the industry: 86.15% of the companies in the same industry are doing better.
The Debt to FCF ratio of TWO is 30.72, which is on the high side as it means it would take TWO, 30.72 years of fcf income to pay off all of its debts.
TWO has a better Debt to FCF ratio (30.72) than 67.69% of its industry peers.
TWO has a Debt/Equity ratio of 4.59. This is a high value indicating a heavy dependency on external financing.
TWO has a worse Debt to Equity ratio (4.59) than 64.62% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 4.59 | ||
| Debt/FCF | 30.72 | ||
| Altman-Z | -0.87 |
ROIC/WACCN/A
WACCN/A
2.3 Liquidity
A Current Ratio of 0.14 indicates that TWO may have some problems paying its short term obligations.
The Current ratio of TWO (0.14) is comparable to the rest of the industry.
TWO has a Quick Ratio of 0.14. This is a bad value and indicates that TWO is not financially healthy enough and could expect problems in meeting its short term obligations.
With a Quick ratio value of 0.14, TWO perfoms like the industry average, outperforming 43.08% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.14 | ||
| Quick Ratio | 0.14 |
3. Growth
3.1 Past
The earnings per share for TWO have decreased strongly by -105.88% in the last year.
The Revenue has grown by 215.38% in the past year. This is a very strong growth!
Measured over the past years, TWO shows a small growth in Revenue. The Revenue has been growing by 0.08% on average per year.
EPS 1Y (TTM)-105.88%
EPS 3YN/A
EPS 5YN/A
EPS growth Q2Q-44.44%
Revenue 1Y (TTM)215.38%
Revenue growth 3YN/A
Revenue growth 5Y0.08%
Revenue growth Q2Q2847.53%
3.2 Future
TWO is expected to show a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 236.83% yearly.
TWO is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 15.15% yearly.
EPS Next Y2365.29%
EPS Next 2Y448.08%
EPS Next 3Y236.83%
EPS Next 5YN/A
Revenue Next Year57.88%
Revenue Next 2Y21.14%
Revenue Next 3Y15.15%
Revenue Next 5YN/A
3.3 Evolution
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
4. Valuation
4.1 Price/Earnings Ratio
TWO reported negative earnings for the last year, which makes the Price/Earnings Ratio negative.
Based on the Price/Forward Earnings ratio of 6.70, the valuation of TWO can be described as very cheap.
Compared to the rest of the industry, the Price/Forward Earnings ratio of TWO indicates a rather cheap valuation: TWO is cheaper than 86.15% of the companies listed in the same industry.
Compared to an average S&P500 Price/Forward Earnings ratio of 20.41, TWO is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | N/A | ||
| Fwd PE | 6.7 |
4.2 Price Multiples
Compared to the rest of the industry, the Price/Free Cash Flow ratio of TWO indicates a rather cheap valuation: TWO is cheaper than 92.31% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 4.06 | ||
| EV/EBITDA | N/A |
4.3 Compensation for Growth
The low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
TWO's earnings are expected to grow with 236.83% in the coming years. This may justify a more expensive valuation.
PEG (NY)N/A
PEG (5Y)N/A
EPS Next 2Y448.08%
EPS Next 3Y236.83%
5. Dividend
5.1 Amount
TWO has a Yearly Dividend Yield of 13.75%, which is a nice return.
Compared to an average industry Dividend Yield of 13.07, TWO has a dividend in line with its industry peers.
Compared to an average S&P500 Dividend Yield of 2.41, TWO pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 13.75% |
5.2 History
The dividend of TWO decreases each year by -17.25%.
TWO has paid a dividend for at least 10 years, which is a reliable track record.
The dividend of TWO decreased recently.
Dividend Growth(5Y)-17.25%
Div Incr Years1
Div Non Decr Years1
5.3 Sustainability
105.55% of the earnings are spent on dividend by TWO. This is not a sustainable payout ratio.
DP105.55%
EPS Next 2Y448.08%
EPS Next 3Y236.83%
TWO HARBORS INVESTMENT CORP
NYSE:TWO (5/6/2024, 3:01:49 PM)
After market: 13.15 0 (0%)13.15
+0.06 (+0.46%)
Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupFinancial Services
GICS IndustryMortgage Real Estate Investment Trusts (REITs)"
Earnings (Last)
Earnings (Next)
Inst Owners
Inst Owner Change
Ins Owners
Ins Owner Change
Market Cap1.36B
Analysts
Price Target
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 13.75% |
Dividend Growth(5Y)
DP
Div Incr Years
Div Non Decr Years
Ex-Date
Surprises & Revisions
EPS beat(2)
Avg EPS beat(2)
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EPS beat(8)
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EPS beat(16)
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Revenue beat(2)
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PT rev (1m)
PT rev (3m)
EPS NQ rev (1m)
EPS NQ rev (3m)
EPS NY rev (1m)
EPS NY rev (3m)
Revenue NQ rev (1m)
Revenue NQ rev (3m)
Revenue NY rev (1m)
Revenue NY rev (3m)
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | N/A | ||
| Fwd PE | 6.7 | ||
| P/S | |||
| P/FCF | |||
| P/OCF | |||
| P/B | |||
| P/tB | |||
| EV/EBITDA |
EPS(TTM)
EY
EPS(NY)
Fwd EY
FCF(TTM)
FCFY
OCF(TTM)
OCFY
SpS
BVpS
TBVpS
PEG (NY)N/A
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 1.73% | ||
| ROE | 10.19% | ||
| ROCE | |||
| ROIC | |||
| ROICexc | |||
| ROICexgc | |||
| OM | 28.23% | ||
| PM (TTM) | 19.26% | ||
| GM | 38.02% | ||
| FCFM |
ROA(3y)
ROA(5y)
ROE(3y)
ROE(5y)
ROIC(3y)
ROIC(5y)
ROICexc(3y)
ROICexc(5y)
ROICexgc(3y)
ROICexgc(5y)
ROCE(3y)
ROCE(5y)
ROICexcg growth 3Y
ROICexcg growth 5Y
ROICexc growth 3Y
ROICexc growth 5Y
OM growth 3Y
OM growth 5Y
PM growth 3Y
PM growth 5Y
GM growth 3Y
GM growth 5Y
F-Score
Asset Turnover0.09
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 4.59 | ||
| Debt/FCF | |||
| Debt/EBITDA | |||
| Cap/Depr | |||
| Cap/Sales | |||
| Interest Coverage | |||
| Cash Conversion | |||
| Profit Quality | |||
| Current Ratio | 0.14 | ||
| Quick Ratio | 0.14 | ||
| Altman-Z |
F-Score
WACC
ROIC/WACC
Cap/Depr(3y)
Cap/Depr(5y)
Cap/Sales(3y)
Cap/Sales(5y)
Profit Quality(3y)
Profit Quality(5y)
Growth
EPS 1Y (TTM)-105.88%
EPS 3YN/A
EPS 5Y
EPS growth Q2Q
EPS Next Y2365.29%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)215.38%
Revenue growth 3YN/A
Revenue growth 5Y
Revenue growth Q2Q
Revenue Next Year
Revenue Next 2Y
Revenue Next 3Y
Revenue Next 5Y
EBIT growth 1Y
EBIT growth 3Y
EBIT growth 5Y
EBIT Next Year
EBIT Next 3Y
EBIT Next 5Y
FCF growth 1Y
FCF growth 3Y
FCF growth 5Y
OCF growth 1Y
OCF growth 3Y
OCF growth 5Y