TWO HARBORS INVESTMENT CORP (TWO) Stock Fundamental Analysis
NYSE:TWO - New York Stock Exchange, Inc. - US90187B8046 - REIT - Currency: USD
Overall TWO gets a fundamental rating of 5 out of 10. We evaluated TWO against 65 industry peers in the Mortgage Real Estate Investment Trusts (REITs)" industry. TWO has an excellent profitability rating, but there are concerns on its financial health. A decent growth rate in combination with a cheap valuation! Better keep an eye on TWO.
1. Profitability
1.1 Basic Checks
TWO had positive 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 1.15%. This is amongst the best in the industry. TWO outperforms 84.62% of its industry peers.
TWO has a better Return On Equity (7.33%) than 89.23% of its industry peers.
With an excellent Return On Invested Capital value of 1.74%, TWO belongs to the best of the industry, outperforming 86.15% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 1.15% | ||
| ROE | 7.33% | ||
| ROIC | 1.74% |
ROA(3y)0.75%
ROA(5y)-1.08%
ROE(3y)4.44%
ROE(5y)-7.45%
ROIC(3y)N/A
ROIC(5y)N/A
1.3 Margins
The Profit Margin of TWO (12.66%) is better than 75.38% of its industry peers.
TWO's Profit Margin has improved in the last couple of years.
With an excellent Operating Margin value of 21.52%, TWO belongs to the best of the industry, outperforming 83.08% of the companies in the same industry.
TWO's Operating Margin has improved in the last couple of years.
TWO's Gross Margin of 38.60% is amongst the best of the industry. TWO outperforms 83.08% of its industry peers.
TWO's Gross Margin has improved in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 21.52% | ||
| PM (TTM) | 12.66% | ||
| GM | 38.6% |
OM growth 3Y-12.74%
OM growth 5Y2.85%
PM growth 3Y-8.93%
PM growth 5Y1.71%
GM growth 3Y-9.32%
GM growth 5Y7.66%
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
The debt/assets ratio for TWO has been reduced compared to a year ago.
2.2 Solvency
TWO has an Altman-Z score of -0.98. This is a bad value and indicates that TWO is not financially healthy and even has some risk of bankruptcy.
Looking at the Altman-Z score, with a value of -0.98, TWO is doing worse than 90.77% of the companies in the same industry.
TWO has a debt to FCF ratio of 34.03. This is a negative value and a sign of low solvency as TWO would need 34.03 years to pay back of all of its debts.
TWO has a Debt to FCF ratio of 34.03. This is in the better half of the industry: TWO outperforms 76.92% of its industry peers.
A Debt/Equity ratio of 5.10 is on the high side and indicates that TWO has dependencies on debt financing.
TWO has a Debt to Equity ratio (5.10) which is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 5.1 | ||
| Debt/FCF | 34.03 | ||
| Altman-Z | -0.98 |
ROIC/WACCN/A
WACCN/A
2.3 Liquidity
A Current Ratio of 0.15 indicates that TWO may have some problems paying its short term obligations.
The Current ratio of TWO (0.15) is comparable to the rest of the industry.
A Quick Ratio of 0.15 indicates that TWO may have some problems paying its short term obligations.
TWO has a Quick ratio (0.15) which is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.15 | ||
| Quick Ratio | 0.15 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an impressive 772.73% over the past year.
The earnings per share for TWO have been decreasing by -36.86% on average. This is quite bad
The Revenue has been growing slightly by 4.77% in the past year.
Measured over the past years, TWO shows a decrease in Revenue. The Revenue has been decreasing by -1.54% on average per year.
EPS 1Y (TTM)772.73%
EPS 3Y-44.86%
EPS 5Y-36.86%
EPS Q2Q%380%
Revenue 1Y (TTM)4.77%
Revenue growth 3Y37.26%
Revenue growth 5Y-1.54%
Sales Q2Q%51.84%
3.2 Future
TWO is expected to show a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 51.67% yearly.
Based on estimates for the next years, TWO will show a small growth in Revenue. The Revenue will grow by 3.77% on average per year.
EPS Next Y149.75%
EPS Next 2Y71.3%
EPS Next 3Y51.67%
EPS Next 5YN/A
Revenue Next Year32.64%
Revenue Next 2Y22.15%
Revenue Next 3Y3.77%
Revenue Next 5YN/A
3.3 Evolution
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
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
A Price/Earnings ratio of 14.73 indicates a correct valuation of TWO.
The rest of the industry has a similar Price/Earnings ratio as TWO.
Compared to an average S&P500 Price/Earnings ratio of 26.32, TWO is valued a bit cheaper.
Based on the Price/Forward Earnings ratio of 6.75, 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 84.62% of the companies listed in the same industry.
Compared to an average S&P500 Price/Forward Earnings ratio of 22.13, TWO is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 14.73 | ||
| Fwd PE | 6.75 |
4.2 Price Multiples
Based on the Price/Free Cash Flow ratio, TWO is valued cheaper than 98.46% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 3.53 | ||
| 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 has an outstanding profitability rating, which may justify a higher PE ratio.
A more expensive valuation may be justified as TWO's earnings are expected to grow with 51.67% in the coming years.
PEG (NY)0.1
PEG (5Y)N/A
EPS Next 2Y71.3%
EPS Next 3Y51.67%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 16.39%, TWO is a good candidate for dividend investing.
In the last 3 months the price of TWO has falen by -21.05%. A price decline artificially increases the dividend yield. It may be a sign investors do not expect the dividend to last.
Compared to an average industry Dividend Yield of 12.22, TWO pays a better dividend. On top of this TWO pays more dividend than 92.31% of the companies listed in the same industry.
Compared to an average S&P500 Dividend Yield of 2.40, TWO pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 16.39% |
5.2 History
The dividend of TWO decreases each year by -22.81%.
TWO has been paying a dividend for at least 10 years, so it has a reliable track record.
Dividend Growth(5Y)-22.81%
Div Incr Years0
Div Non Decr Years0
5.3 Sustainability
TWO pays out 149.30% of its income as dividend. This is not a sustainable payout ratio.
DP149.3%
EPS Next 2Y71.3%
EPS Next 3Y51.67%
NYSE:TWO (6/16/2025, 1:42:58 PM)
10.9
+0.1 (+0.93%)
Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupFinancial Services
GICS IndustryMortgage Real Estate Investment Trusts (REITs)"
Earnings (Last)
Earnings (Next)
Inst Owners69.84%
Inst Owner Change-3.34%
Ins Owners0.86%
Ins Owner Change13.63%
Market Cap1.13B
Analysts75.71
Price Target13.99 (28.35%)
Short Float %5.24%
Short Ratio3.03
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 16.39% |
Yearly Dividend2.27
Dividend Growth(5Y)-22.81%
DP149.3%
Div Incr Years0
Div Non Decr Years0
Ex-Date
Surprises & Revisions
EPS beat(2)0
Avg EPS beat(2)-40.64%
Min EPS beat(2)-44.22%
Max EPS beat(2)-37.05%
EPS beat(4)0
Avg EPS beat(4)-47.35%
Min EPS beat(4)-61.58%
Max EPS beat(4)-37.05%
EPS beat(8)0
Avg EPS beat(8)-72.01%
EPS beat(12)1
Avg EPS beat(12)-59.64%
EPS beat(16)3
Avg EPS beat(16)-43.99%
Revenue beat(2)1
Avg Revenue beat(2)1.36%
Min Revenue beat(2)-30.77%
Max Revenue beat(2)33.5%
Revenue beat(4)1
Avg Revenue beat(4)-15.14%
Min Revenue beat(4)-41.49%
Max Revenue beat(4)33.5%
Revenue beat(8)1
Avg Revenue beat(8)-6527.53%
Revenue beat(12)3
Avg Revenue beat(12)-4388.58%
Revenue beat(16)6
Avg Revenue beat(16)-3080.63%
PT rev (1m)-1.03%
PT rev (3m)-3.03%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-11.67%
EPS NY rev (1m)0%
EPS NY rev (3m)-21.58%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)10.97%
Revenue NY rev (1m)0%
Revenue NY rev (3m)18.47%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 14.73 | ||
| Fwd PE | 6.75 | ||
| P/S | 0.91 | ||
| P/FCF | 3.53 | ||
| P/OCF | 3.53 | ||
| P/B | 0.53 | ||
| P/tB | 0.53 | ||
| EV/EBITDA | N/A |
EPS(TTM)0.74
EY6.79%
EPS(NY)1.61
Fwd EY14.81%
FCF(TTM)3.09
FCFY28.36%
OCF(TTM)3.09
OCFY28.36%
SpS11.94
BVpS20.64
TBVpS20.64
PEG (NY)0.1
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 1.15% | ||
| ROE | 7.33% | ||
| ROCE | 7.62% | ||
| ROIC | 1.74% | ||
| ROICexc | 1.82% | ||
| ROICexgc | 1.86% | ||
| OM | 21.52% | ||
| PM (TTM) | 12.66% | ||
| GM | 38.6% | ||
| FCFM | 25.89% |
ROA(3y)0.75%
ROA(5y)-1.08%
ROE(3y)4.44%
ROE(5y)-7.45%
ROIC(3y)N/A
ROIC(5y)N/A
ROICexc(3y)N/A
ROICexc(5y)N/A
ROICexgc(3y)N/A
ROICexgc(5y)N/A
ROCE(3y)N/A
ROCE(5y)N/A
ROICexcg growth 3Y18.51%
ROICexcg growth 5Y28.04%
ROICexc growth 3Y18.92%
ROICexc growth 5Y27.73%
OM growth 3Y-12.74%
OM growth 5Y2.85%
PM growth 3Y-8.93%
PM growth 5Y1.71%
GM growth 3Y-9.32%
GM growth 5Y7.66%
F-Score7
Asset Turnover0.09
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 5.1 | ||
| Debt/FCF | 34.03 | ||
| Debt/EBITDA | N/A | ||
| Cap/Depr | N/A | ||
| Cap/Sales | N/A | ||
| Interest Coverage | 0.51 | ||
| Cash Conversion | N/A | ||
| Profit Quality | 204.39% | ||
| Current Ratio | 0.15 | ||
| Quick Ratio | 0.15 | ||
| Altman-Z | -0.98 |
F-Score7
WACCN/A
ROIC/WACCN/A
Cap/Depr(3y)N/A
Cap/Depr(5y)N/A
Cap/Sales(3y)N/A
Cap/Sales(5y)N/A
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)772.73%
EPS 3Y-44.86%
EPS 5Y-36.86%
EPS Q2Q%380%
EPS Next Y149.75%
EPS Next 2Y71.3%
EPS Next 3Y51.67%
EPS Next 5YN/A
Revenue 1Y (TTM)4.77%
Revenue growth 3Y37.26%
Revenue growth 5Y-1.54%
Sales Q2Q%51.84%
Revenue Next Year32.64%
Revenue Next 2Y22.15%
Revenue Next 3Y3.77%
Revenue Next 5YN/A
EBIT growth 1Y-20.15%
EBIT growth 3Y19.78%
EBIT growth 5Y1.26%
EBIT Next YearN/A
EBIT Next 3YN/A
EBIT Next 5YN/A
FCF growth 1Y-52.34%
FCF growth 3Y-22%
FCF growth 5Y-28.24%
OCF growth 1Y-52.34%
OCF growth 3Y-22%
OCF growth 5Y-28.24%