TWO HARBORS INVESTMENT CORP (TWO) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:TWO - US90187B8046 - REIT
10.94 USD
+0.23 (+2.15%)
11.4 USD
+0.46 (+4.2%)
Overall TWO gets a fundamental rating of 4 out of 10. We evaluated TWO against 68 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 has a decent growth rate and is not valued too expensively.
1. Profitability
1.1 Basic Checks
TWO had positive earnings in the past year.
TWO had a negative operating cash flow in the past year.
The reported net income has been mixed in the past 5 years: TWO reported negative net income in multiple 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 -2.23%. This is in the lower half of the industry: TWO underperforms 79.41% of its industry peers.
TWO's Return On Equity of -13.70% is on the low side compared to the rest of the industry. TWO is outperformed by 82.35% of its industry peers.
TWO has a Return On Invested Capital of 0.23%. This is in the lower half of the industry: TWO underperforms 69.12% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | -2.23% | ||
| ROE | -13.7% | ||
| ROIC | 0.23% |
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.
With a Operating Margin value of 2.96%, TWO is not doing good in the industry: 72.06% of the companies in the same industry are doing better.
In the last couple of years the Operating Margin of TWO has grown nicely.
With an excellent Gross Margin value of 42.34%, TWO belongs to the best of the industry, outperforming 82.35% of the companies in the same industry.
TWO's Gross Margin has improved in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 2.96% | ||
| PM (TTM) | N/A | ||
| GM | 42.34% |
OM growth 3Y-12.76%
OM growth 5Y2.83%
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.
TWO has a better debt/assets ratio than last year.
2.2 Solvency
Based on the Altman-Z score of -1.14, we must say that TWO is in the distress zone and has some risk of bankruptcy.
The Altman-Z score of TWO (-1.14) is worse than 97.06% of its industry peers.
A Debt/Equity ratio of 4.76 is on the high side and indicates that TWO has dependencies on debt financing.
TWO has a Debt to Equity ratio (4.76) which is in line with its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 4.76 | ||
| Debt/FCF | N/A | ||
| Altman-Z | -1.14 |
ROIC/WACCN/A
WACCN/A
2.3 Liquidity
TWO has a Current Ratio of 0.17. This is a bad value and indicates that TWO is not financially healthy enough and could expect problems in meeting its short term obligations.
Looking at the Current ratio, with a value of 0.17, TWO is in line with its industry, outperforming 55.88% of the companies in the same industry.
A Quick Ratio of 0.17 indicates that TWO may have some problems paying its short term obligations.
The Quick ratio of TWO (0.17) is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.17 | ||
| Quick Ratio | 0.17 |
3. Growth
3.1 Past
TWO shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 350.00%, which is quite impressive.
The earnings per share for TWO have been decreasing by -36.86% on average. This is quite bad
The Revenue has grown by 11.13% in the past year. This is quite good.
TWO shows a decrease in Revenue. Measured over the last years, the Revenue has been decreasing by -1.54% yearly.
EPS 1Y (TTM)350%
EPS 3Y-44.86%
EPS 5Y-36.86%
EPS Q2Q%176.92%
Revenue 1Y (TTM)11.13%
Revenue growth 3Y37.26%
Revenue growth 5Y-1.54%
Sales Q2Q%44.42%
3.2 Future
Based on estimates for the next years, TWO will show a very strong growth in Earnings Per Share. The EPS will grow by 39.13% on average per year.
TWO is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 16.42% yearly.
EPS Next Y125.87%
EPS Next 2Y62.37%
EPS Next 3Y39.13%
EPS Next 5YN/A
Revenue Next Year42.68%
Revenue Next 2Y22.49%
Revenue Next 3Y16.42%
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.
The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
TWO is valuated reasonably with a Price/Earnings ratio of 10.13.
Compared to the rest of the industry, the Price/Earnings ratio of TWO indicates a somewhat cheap valuation: TWO is cheaper than 69.12% of the companies listed in the same industry.
TWO is valuated cheaply when we compare the Price/Earnings ratio to 27.00, which is the current average of the S&P500 Index.
A Price/Forward Earnings ratio of 7.54 indicates a rather cheap valuation of TWO.
Based on the Price/Forward Earnings ratio, TWO is valued a bit cheaper than 73.53% of the companies in the same industry.
TWO is valuated cheaply when we compare the Price/Forward Earnings ratio to 23.70, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 10.13 | ||
| Fwd PE | 7.54 |
4.2 Price Multiples
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | N/A | ||
| 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 39.13% in the coming years. This may justify a more expensive valuation.
PEG (NY)0.08
PEG (5Y)N/A
EPS Next 2Y62.37%
EPS Next 3Y39.13%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 9.71%, TWO is a good candidate for dividend investing.
Compared to an average industry Dividend Yield of 11.16, TWO is paying slightly less dividend.
Compared to an average S&P500 Dividend Yield of 1.94, TWO pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 9.71% |
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-95.7%
EPS Next 2Y62.37%
EPS Next 3Y39.13%
10.94
+0.23 (+2.15%)
Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupFinancial Services
GICS IndustryMortgage Real Estate Investment Trusts (REITs)"
Earnings (Last)
Earnings (Next)
Inst Owners70.4%
Inst Owner Change0%
Ins Owners1.14%
Ins Owner Change5.33%
Market Cap1.14B
Revenue(TTM)933.29M
Net Income(TTM)-242.81M
Analysts72.31
Price Target11.12 (1.65%)
Short Float %8.56%
Short Ratio3.79
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 9.71% |
Yearly Dividend2.27
Dividend Growth(5Y)-22.81%
DP-95.7%
Div Incr Years0
Div Non Decr Years0
Ex-Date
Surprises & Revisions
EPS beat(2)0
Avg EPS beat(2)-12.86%
Min EPS beat(2)-24.05%
Max EPS beat(2)-1.67%
EPS beat(4)0
Avg EPS beat(4)-26.75%
Min EPS beat(4)-44.22%
Max EPS beat(4)-1.67%
EPS beat(8)0
Avg EPS beat(8)-49.08%
EPS beat(12)0
Avg EPS beat(12)-61.9%
EPS beat(16)2
Avg EPS beat(16)-46.7%
Revenue beat(2)2
Avg Revenue beat(2)12.53%
Min Revenue beat(2)5.25%
Max Revenue beat(2)19.81%
Revenue beat(4)3
Avg Revenue beat(4)6.94%
Min Revenue beat(4)-30.77%
Max Revenue beat(4)33.5%
Revenue beat(8)3
Avg Revenue beat(8)-40.42%
Revenue beat(12)3
Avg Revenue beat(12)-4527.34%
Revenue beat(16)7
Avg Revenue beat(16)-3082.98%
PT rev (1m)-0.15%
PT rev (3m)-4.53%
EPS NQ rev (1m)4.11%
EPS NQ rev (3m)-1.53%
EPS NY rev (1m)1.65%
EPS NY rev (3m)0.33%
Revenue NQ rev (1m)15.15%
Revenue NQ rev (3m)34.11%
Revenue NY rev (1m)0%
Revenue NY rev (3m)11.22%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 10.13 | ||
| Fwd PE | 7.54 | ||
| P/S | 1.22 | ||
| P/FCF | N/A | ||
| P/OCF | N/A | ||
| P/B | 0.64 | ||
| P/tB | 0.64 | ||
| EV/EBITDA | N/A |
EPS(TTM)1.08
EY9.87%
EPS(NY)1.45
Fwd EY13.25%
FCF(TTM)-0.47
FCFYN/A
OCF(TTM)-0.47
OCFYN/A
SpS8.96
BVpS17.01
TBVpS17.01
PEG (NY)0.08
PEG (5Y)N/A
Graham Number20.33
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | -2.23% | ||
| ROE | -13.7% | ||
| ROCE | 0.84% | ||
| ROIC | 0.23% | ||
| ROICexc | 0.25% | ||
| ROICexgc | 0.26% | ||
| OM | 2.96% | ||
| PM (TTM) | N/A | ||
| GM | 42.34% | ||
| FCFM | 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
ROICexc(3y)N/A
ROICexc(5y)N/A
ROICexgc(3y)N/A
ROICexgc(5y)N/A
ROCE(3y)N/A
ROCE(5y)N/A
ROICexgc growth 3Y18.48%
ROICexgc growth 5Y28.02%
ROICexc growth 3Y18.89%
ROICexc growth 5Y27.71%
OM growth 3Y-12.76%
OM growth 5Y2.83%
PM growth 3Y-8.93%
PM growth 5Y1.71%
GM growth 3Y-9.32%
GM growth 5Y7.66%
F-Score4
Asset Turnover0.09
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 4.76 | ||
| Debt/FCF | N/A | ||
| Debt/EBITDA | N/A | ||
| Cap/Depr | N/A | ||
| Cap/Sales | N/A | ||
| Interest Coverage | 0.05 | ||
| Cash Conversion | N/A | ||
| Profit Quality | N/A | ||
| Current Ratio | 0.17 | ||
| Quick Ratio | 0.17 | ||
| Altman-Z | -1.14 |
F-Score4
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)350%
EPS 3Y-44.86%
EPS 5Y-36.86%
EPS Q2Q%176.92%
EPS Next Y125.87%
EPS Next 2Y62.37%
EPS Next 3Y39.13%
EPS Next 5YN/A
Revenue 1Y (TTM)11.13%
Revenue growth 3Y37.26%
Revenue growth 5Y-1.54%
Sales Q2Q%44.42%
Revenue Next Year42.68%
Revenue Next 2Y22.49%
Revenue Next 3Y16.42%
Revenue Next 5YN/A
EBIT growth 1Y113.47%
EBIT growth 3Y19.75%
EBIT growth 5Y1.25%
EBIT Next YearN/A
EBIT Next 3YN/A
EBIT Next 5YN/A
FCF growth 1Y-110.47%
FCF growth 3Y-22%
FCF growth 5Y-28.24%
OCF growth 1Y-110.47%
OCF growth 3Y-22%
OCF growth 5Y-28.24%
TWO HARBORS INVESTMENT CORP / TWO FAQ
Can you provide the ChartMill fundamental rating for TWO HARBORS INVESTMENT CORP?
ChartMill assigns a fundamental rating of 4 / 10 to TWO.
What is the valuation status of TWO HARBORS INVESTMENT CORP (TWO) stock?
ChartMill assigns a valuation rating of 6 / 10 to TWO HARBORS INVESTMENT CORP (TWO). This can be considered as Fairly Valued.
What is the profitability of TWO stock?
TWO HARBORS INVESTMENT CORP (TWO) has a profitability rating of 4 / 10.
Can you provide the PE and PB ratios for TWO stock?
The Price/Earnings (PE) ratio for TWO HARBORS INVESTMENT CORP (TWO) is 10.13 and the Price/Book (PB) ratio is 0.64.
What is the financial health of TWO HARBORS INVESTMENT CORP (TWO) stock?
The financial health rating of TWO HARBORS INVESTMENT CORP (TWO) is 1 / 10.