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 4 out of 10. We evaluated TWO against 67 industry peers in the Mortgage Real Estate Investment Trusts (REITs)" industry. TWO has a bad profitability rating. Also its financial health evaluation is rather negative. TWO is valued quite cheap, but it does not seem to be growing.
1. Profitability
1.1 Basic Checks
TWO had positive earnings in the past year.
In the past year TWO had a positive cash flow from operations.
The reported net income has been mixed in the past 5 years: TWO reported negative net income in multiple years.
Each year in the past 5 years TWO had a positive operating cash flow.
1.2 Ratios
The Return On Assets of TWO (-2.71%) is worse than 79.10% of its industry peers.
TWO's Return On Equity of -18.64% is on the low side compared to the rest of the industry. TWO is outperformed by 86.57% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | -2.71% | ||
| ROE | -18.64% | ||
| ROIC | N/A |
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
In the last couple of years the Profit Margin of TWO has grown nicely.
In the last couple of years the Operating Margin of TWO has grown nicely.
Looking at the Gross Margin, with a value of 13.76%, TWO is doing worse than 64.18% of the companies in the same industry.
In the last couple of years the Gross Margin of TWO has grown nicely.
TWO does not have Profit Margin and Operating Margin available, so we won't be analyzing them here.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | N/A | ||
| PM (TTM) | N/A | ||
| GM | 13.76% |
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
Compared to 1 year ago, TWO has an improved debt to assets ratio.
2.2 Solvency
Based on the Altman-Z score of -1.23, we must say that TWO is in the distress zone and has some risk of bankruptcy.
Looking at the Altman-Z score, with a value of -1.23, TWO is doing worse than 95.52% of the companies in the same industry.
TWO has a debt to FCF ratio of 36.73. This is a negative value and a sign of low solvency as TWO would need 36.73 years to pay back of all of its debts.
TWO has a Debt to FCF ratio of 36.73. This is in the better half of the industry: TWO outperforms 77.61% of its industry peers.
TWO has a Debt/Equity ratio of 5.40. This is a high value indicating a heavy dependency on external financing.
Looking at the Debt to Equity ratio, with a value of 5.40, TWO is in line with its industry, outperforming 44.78% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 5.4 | ||
| Debt/FCF | 36.73 | ||
| Altman-Z | -1.23 |
ROIC/WACCN/A
WACCN/A
2.3 Liquidity
A Current Ratio of 0.11 indicates that TWO may have some problems paying its short term obligations.
TWO has a Current ratio of 0.11. This is comparable to the rest of the industry: TWO outperforms 41.79% of its industry peers.
TWO has a Quick Ratio of 0.11. This is a bad value and indicates that TWO is not financially healthy enough and could expect problems in meeting its short term obligations.
TWO has a Quick ratio of 0.11. This is comparable to the rest of the industry: TWO outperforms 41.79% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.11 | ||
| Quick Ratio | 0.11 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an impressive 750.00% over the past year.
TWO shows a very negative growth in Earnings Per Share. Measured over the last years, the EPS has been decreasing by -36.86% yearly.
TWO shows a very negative growth in Revenue. In the last year, the Revenue has decreased by -54.30%.
TWO shows a decrease in Revenue. Measured over the last years, the Revenue has been decreasing by -1.54% yearly.
EPS 1Y (TTM)750%
EPS 3Y-44.86%
EPS 5Y-36.86%
EPS Q2Q%64.71%
Revenue 1Y (TTM)-54.3%
Revenue growth 3Y37.26%
Revenue growth 5Y-1.54%
Sales Q2Q%52.62%
3.2 Future
The Earnings Per Share is expected to grow by 41.11% on average over the next years. This is a very strong growth
TWO is expected to show a decrease in Revenue. In the coming years, the Revenue will decrease by -4.62% yearly.
EPS Next Y153.42%
EPS Next 2Y64.67%
EPS Next 3Y41.11%
EPS Next 5YN/A
Revenue Next Year38.6%
Revenue Next 2Y20.22%
Revenue Next 3Y-4.62%
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 decreasing.
4. Valuation
4.1 Price/Earnings Ratio
A Price/Earnings ratio of 11.59 indicates a reasonable valuation of TWO.
67.16% of the companies in the same industry are more expensive than TWO, based on the Price/Earnings ratio.
TWO's Price/Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 26.48.
A Price/Forward Earnings ratio of 6.60 indicates a rather cheap valuation of TWO.
85.07% of the companies in the same industry are more expensive than TWO, based on the Price/Forward Earnings ratio.
TWO is valuated cheaply when we compare the Price/Forward Earnings ratio to 34.04, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 11.59 | ||
| Fwd PE | 6.6 |
4.2 Price Multiples
Based on the Price/Free Cash Flow ratio, TWO is valued cheaper than 97.01% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 3.7 | ||
| EV/EBITDA | N/A |
4.3 Compensation for Growth
TWO's 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 41.11% in the coming years. This may justify a more expensive valuation.
PEG (NY)0.08
PEG (5Y)N/A
EPS Next 2Y64.67%
EPS Next 3Y41.11%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 17.54%, TWO is a good candidate for dividend investing.
TWO's Dividend Yield is a higher than the industry average which is at 10.53.
TWO's Dividend Yield is rather good when compared to the S&P500 average which is at 2.40.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 17.54% |
5.2 History
The dividend of TWO decreases each year by -22.81%.
TWO has paid a dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)-22.81%
Div Incr Years0
Div Non Decr Years0
5.3 Sustainability
TWO has negative earnings and hence a negative payout ratio. The dividend may be in danger.
DP-67.29%
EPS Next 2Y64.67%
EPS Next 3Y41.11%
9.85
-0.07 (-0.71%)
Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupFinancial Services
GICS IndustryMortgage Real Estate Investment Trusts (REITs)"
Earnings (Last)
Earnings (Next)
Inst Owners69.81%
Inst Owner Change-0.16%
Ins Owners0.86%
Ins Owner Change1.85%
Market Cap1.03B
Analysts74.29
Price Target12.33 (25.18%)
Short Float %7.75%
Short Ratio3.96
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 17.54% |
Yearly Dividend2.27
Dividend Growth(5Y)-22.81%
DP-67.29%
Div Incr Years0
Div Non Decr Years0
Ex-Date
Surprises & Revisions
EPS beat(2)0
Avg EPS beat(2)-30.55%
Min EPS beat(2)-37.05%
Max EPS beat(2)-24.05%
EPS beat(4)0
Avg EPS beat(4)-41.72%
Min EPS beat(4)-61.58%
Max EPS beat(4)-24.05%
EPS beat(8)0
Avg EPS beat(8)-61.66%
EPS beat(12)0
Avg EPS beat(12)-63.4%
EPS beat(16)3
Avg EPS beat(16)-45.24%
Revenue beat(2)2
Avg Revenue beat(2)29.71%
Min Revenue beat(2)25.92%
Max Revenue beat(2)33.5%
Revenue beat(4)2
Avg Revenue beat(4)1.72%
Min Revenue beat(4)-30.77%
Max Revenue beat(4)33.5%
Revenue beat(8)2
Avg Revenue beat(8)-93.49%
Revenue beat(12)3
Avg Revenue beat(12)-4387.16%
Revenue beat(16)7
Avg Revenue beat(16)-3062.04%
PT rev (1m)-2.31%
PT rev (3m)-4.3%
EPS NQ rev (1m)-3.58%
EPS NQ rev (3m)-2.81%
EPS NY rev (1m)-4.03%
EPS NY rev (3m)-17.98%
Revenue NQ rev (1m)11.86%
Revenue NQ rev (3m)11.53%
Revenue NY rev (1m)10.74%
Revenue NY rev (3m)25.69%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 11.59 | ||
| Fwd PE | 6.6 | ||
| P/S | 1.54 | ||
| P/FCF | 3.7 | ||
| P/OCF | 3.7 | ||
| P/B | 0.54 | ||
| P/tB | 0.54 | ||
| EV/EBITDA | N/A |
EPS(TTM)0.85
EY8.63%
EPS(NY)1.49
Fwd EY15.14%
FCF(TTM)2.66
FCFY27.01%
OCF(TTM)2.66
OCFY27.01%
SpS6.41
BVpS18.11
TBVpS18.11
PEG (NY)0.08
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | -2.71% | ||
| ROE | -18.64% | ||
| ROCE | N/A | ||
| ROIC | N/A | ||
| ROICexc | N/A | ||
| ROICexgc | N/A | ||
| OM | N/A | ||
| PM (TTM) | N/A | ||
| GM | 13.76% | ||
| FCFM | 41.47% |
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 3YN/A
ROICexcg growth 5YN/A
ROICexc growth 3YN/A
ROICexc growth 5YN/A
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-Score3
Asset Turnover0.05
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 5.4 | ||
| Debt/FCF | 36.73 | ||
| Debt/EBITDA | N/A | ||
| Cap/Depr | N/A | ||
| Cap/Sales | N/A | ||
| Interest Coverage | N/A | ||
| Cash Conversion | N/A | ||
| Profit Quality | N/A | ||
| Current Ratio | 0.11 | ||
| Quick Ratio | 0.11 | ||
| Altman-Z | -1.23 |
F-Score3
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)750%
EPS 3Y-44.86%
EPS 5Y-36.86%
EPS Q2Q%64.71%
EPS Next Y153.42%
EPS Next 2Y64.67%
EPS Next 3Y41.11%
EPS Next 5YN/A
Revenue 1Y (TTM)-54.3%
Revenue growth 3Y37.26%
Revenue growth 5Y-1.54%
Sales Q2Q%52.62%
Revenue Next Year38.6%
Revenue Next 2Y20.22%
Revenue Next 3Y-4.62%
Revenue Next 5YN/A
EBIT growth 1Y-169.06%
EBIT growth 3Y19.78%
EBIT growth 5Y1.26%
EBIT Next YearN/A
EBIT Next 3YN/A
EBIT Next 5YN/A
FCF growth 1Y-61.34%
FCF growth 3Y-22%
FCF growth 5Y-28.24%
OCF growth 1Y-61.34%
OCF growth 3Y-22%
OCF growth 5Y-28.24%