TWO HARBORS INVESTMENT CORP (TWO) Stock Fundamental Analysis
USA - NYSE:TWO - US90187B8046 - REIT
9.87 USD
+0.11 (+1.13%)
9.88 USD
+0.01 (+0.1%)
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 scores decently on growth, while it is valued quite cheap. This could make an interesting combination.
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.
In multiple years TWO reported negative net income over the last 5 years.
In the past 5 years TWO always reported a positive cash flow from operatings.
1.2 Ratios
TWO has a Return On Assets of -2.71%. This is in the lower half of the industry: TWO underperforms 77.61% 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
TWO's Profit Margin has improved in the last couple of years.
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 67.16% of the companies in the same industry.
TWO's Gross Margin has improved in the last couple of years.
The Profit Margin and Operating Margin are not available for TWO so they could not be analyzed.
| 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.
TWO has more shares outstanding than it did 5 years ago.
Compared to 1 year ago, TWO has an improved debt to assets ratio.
2.2 Solvency
TWO has an Altman-Z score of -1.23. This is a bad value and indicates that TWO is not financially healthy and even has some risk of bankruptcy.
TWO's Altman-Z score of -1.23 is on the low side compared to the rest of the industry. TWO is outperformed by 97.01% of its industry peers.
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.
Looking at the Debt to FCF ratio, with a value of 36.73, TWO is in the better half of the industry, outperforming 76.12% of the companies in the same industry.
TWO has a Debt/Equity ratio of 5.40. This is a high value indicating a heavy dependency on external financing.
TWO has a Debt to Equity ratio (5.40) which is in line with its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 5.4 | ||
| Debt/FCF | 36.73 | ||
| Altman-Z | -1.23 |
ROIC/WACCN/A
WACCN/A
2.3 Liquidity
TWO has a Current 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's Current ratio of 0.11 is in line compared to the rest of the industry. TWO outperforms 41.79% of its industry peers.
A Quick Ratio of 0.11 indicates that TWO may have some problems paying its short term obligations.
TWO's Quick ratio of 0.11 is in line compared 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.
The earnings per share for TWO have been decreasing by -36.86% on average. This is quite bad
TWO shows a very negative growth in Revenue. In the last year, the Revenue has decreased by -54.30%.
The Revenue has been decreasing by -1.54% on average over the past years.
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
TWO is expected to show a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 43.82% yearly.
Based on estimates for the next years, TWO will show a small growth in Revenue. The Revenue will grow by 7.29% on average per year.
EPS Next Y125.14%
EPS Next 2Y62.14%
EPS Next 3Y43.82%
EPS Next 5YN/A
Revenue Next Year35.44%
Revenue Next 2Y15.64%
Revenue Next 3Y7.29%
Revenue Next 5YN/A
3.3 Evolution
The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
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
Based on the Price/Earnings ratio of 11.61, the valuation of TWO can be described as reasonable.
Based on the Price/Earnings ratio, TWO is valued a bit cheaper than the industry average as 67.16% of the companies are valued more expensively.
TWO is valuated cheaply when we compare the Price/Earnings ratio to 27.76, which is the current average of the S&P500 Index.
Based on the Price/Forward Earnings ratio of 6.83, 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 83.58% of the companies listed in the same industry.
TWO's Price/Forward Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 23.18.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 11.61 | ||
| Fwd PE | 6.83 |
4.2 Price Multiples
Based on the Price/Free Cash Flow ratio, TWO is valued cheaply inside the industry as 95.52% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 3.71 | ||
| 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 43.82% in the coming years. This may justify a more expensive valuation.
PEG (NY)0.09
PEG (5Y)N/A
EPS Next 2Y62.14%
EPS Next 3Y43.82%
5. Dividend
5.1 Amount
TWO has a Yearly Dividend Yield of 16.58%, which is a nice return.
TWO's Dividend Yield is rather good when compared to the industry average which is at 11.22. TWO pays more dividend than 92.54% of the companies in the same industry.
TWO's Dividend Yield is rather good when compared to the S&P500 average which is at 2.41.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 16.58% |
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
The earnings of TWO are negative and hence is the payout ratio. TWO will probably not be able to sustain this dividend level.
DP-67.29%
EPS Next 2Y62.14%
EPS Next 3Y43.82%
9.87
+0.11 (+1.13%)
Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupFinancial Services
GICS IndustryMortgage Real Estate Investment Trusts (REITs)"
Earnings (Last)
Earnings (Next)
Inst Owners73.23%
Inst Owner Change5.5%
Ins Owners0.85%
Ins Owner Change2.05%
Market Cap1.03B
Analysts74.29
Price Target11.65 (18.03%)
Short Float %7.24%
Short Ratio3.93
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 16.58% |
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)-0.72%
PT rev (3m)-14.76%
EPS NQ rev (1m)6.76%
EPS NQ rev (3m)-8.57%
EPS NY rev (1m)7.86%
EPS NY rev (3m)-14.74%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)0.01%
Revenue NY rev (1m)0%
Revenue NY rev (3m)6.14%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 11.61 | ||
| Fwd PE | 6.83 | ||
| P/S | 1.54 | ||
| P/FCF | 3.71 | ||
| P/OCF | 3.71 | ||
| P/B | 0.54 | ||
| P/tB | 0.54 | ||
| EV/EBITDA | N/A |
EPS(TTM)0.85
EY8.61%
EPS(NY)1.45
Fwd EY14.65%
FCF(TTM)2.66
FCFY26.96%
OCF(TTM)2.66
OCFY26.96%
SpS6.41
BVpS18.11
TBVpS18.11
PEG (NY)0.09
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 Y125.14%
EPS Next 2Y62.14%
EPS Next 3Y43.82%
EPS Next 5YN/A
Revenue 1Y (TTM)-54.3%
Revenue growth 3Y37.26%
Revenue growth 5Y-1.54%
Sales Q2Q%52.62%
Revenue Next Year35.44%
Revenue Next 2Y15.64%
Revenue Next 3Y7.29%
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%