TWO HARBORS INVESTMENT CORP (TWO) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:TWO - US90187B8046 - REIT
13.37 USD
-0.04 (-0.3%)
13.37 USD
0 (0%)
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. TWO has a medium profitability rating, but doesn't score so well on its financial health evaluation. 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.
- In the past year TWO has reported a negative cash flow from operations.
- 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 worse Return On Assets (-2.23%) than 79.41% of its industry peers.
- TWO has a worse Return On Equity (-13.70%) than 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.
- TWO's Operating Margin of 2.96% is on the low side compared to the rest of the industry. TWO is outperformed by 72.06% of its industry peers.
- TWO's Operating Margin has improved in the last couple of years.
- TWO has a Gross Margin of 42.34%. This is amongst the best in the industry. TWO outperforms 82.35% of its industry peers.
- In the last couple of years the Gross Margin of TWO has grown nicely.
| 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
- Compared to 1 year ago, TWO has more shares outstanding
- 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 -1.12. 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 -1.12 is on the low side compared to the rest of the industry. TWO is outperformed by 97.06% of its industry peers.
- TWO has a Debt/Equity ratio of 4.76. This is a high value indicating a heavy dependency on external financing.
- With a Debt to Equity ratio value of 4.76, TWO perfoms like the industry average, outperforming 52.94% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 4.76 | ||
| Debt/FCF | N/A | ||
| Altman-Z | -1.12 |
ROIC/WACCN/A
WACCN/A
2.3 Liquidity
- A Current Ratio of 0.17 indicates that TWO may have some problems paying its short term obligations.
- With a Current ratio value of 0.17, TWO perfoms like the industry average, 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.
- TWO has a Quick ratio of 0.17. This is comparable to the rest of the industry: TWO outperforms 55.88% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.17 | ||
| Quick Ratio | 0.17 |
3. Growth
3.1 Past
- The Earnings Per Share has grown by an impressive 350.00% 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.
- Looking at the last year, TWO shows a quite strong growth in Revenue. The Revenue has grown by 11.13% in the last year.
- The Revenue has been decreasing by -1.54% on average over the past years.
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
- The Earnings Per Share is expected to grow by 39.13% on average over the next years. This is a very strong growth
- The Revenue is expected to grow by 16.42% on average over the next years. This is quite good.
EPS Next Y125.87%
EPS Next 2Y62.37%
EPS Next 3Y39.13%
EPS Next 5YN/A
Revenue Next Year45.53%
Revenue Next 2Y26.44%
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.
- 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
- With a Price/Earnings ratio of 12.38, TWO is valued correctly.
- 64.71% of the companies in the same industry are more expensive than TWO, based on the Price/Earnings ratio.
- Compared to an average S&P500 Price/Earnings ratio of 27.30, TWO is valued rather cheaply.
- The Price/Forward Earnings ratio is 9.22, which indicates a very decent valuation of TWO.
- TWO's Price/Forward Earnings ratio is a bit cheaper when compared to the industry. TWO is cheaper than 63.24% of the companies in the same industry.
- TWO is valuated cheaply when we compare the Price/Forward Earnings ratio to 24.32, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 12.38 | ||
| Fwd PE | 9.22 |
4.2 Price Multiples
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | N/A | ||
| 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.
- A more expensive valuation may be justified as TWO's earnings are expected to grow with 39.13% in the coming years.
PEG (NY)0.1
PEG (5Y)N/A
EPS Next 2Y62.37%
EPS Next 3Y39.13%
5. Dividend
5.1 Amount
- With a Yearly Dividend Yield of 11.39%, TWO is a good candidate for dividend investing.
- Compared to an average industry Dividend Yield of 11.01, TWO has a dividend in line with its industry peers.
- TWO's Dividend Yield is rather good when compared to the S&P500 average which is at 1.82.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 11.39% |
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-95.7%
EPS Next 2Y62.37%
EPS Next 3Y39.13%
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 5 / 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 12.38 and the Price/Book (PB) ratio is 0.79.
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.