TWO HARBORS INVESTMENT CORP (TWO) Fundamental Analysis & Valuation

NYSE:TWO • US90187B8046

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This TWO fundamental analysis includes valuation metrics, fair value assessment, financial health analysis, profitability trends, growth metrics and dividend sustainability analysis.

2

1. TWO Profitability Analysis

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.
  • Each year in the past 5 years TWO had a positive operating cash flow.
TWO Yearly Net Income VS EBIT VS OCF VS FCFTWO Yearly Net Income VS EBIT VS OCF VS FCFYearly Net Income VS EBIT VS OCF VS FCF 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 0 500M -500M 1B -1B -1.5B

1.2 Ratios

  • The Return On Assets of TWO (-4.68%) is worse than 95.59% of its industry peers.
  • Looking at the Return On Equity, with a value of -28.44%, TWO is doing worse than 95.59% of the companies in the same industry.
Industry RankSector Rank
ROA -4.68%
ROE -28.44%
ROIC N/A
ROA(3y)-1.27%
ROA(5y)-0.27%
ROE(3y)-7.87%
ROE(5y)-2.09%
ROIC(3y)N/A
ROIC(5y)N/A
TWO Yearly ROA, ROE, ROICTWO Yearly ROA, ROE, ROICYearly ROA, ROE, ROIC 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 0 -20 -40

1.3 Margins

  • TWO's Gross Margin of 18.58% is on the low side compared to the rest of the industry. TWO is outperformed by 75.00% of its industry peers.
  • In the last couple of years the Gross Margin of TWO has declined.
  • The Profit Margin and Operating Margin are not available for TWO so they could not be analyzed.
Industry RankSector Rank
OM N/A
PM (TTM) N/A
GM 18.58%
OM growth 3YN/A
OM growth 5YN/A
PM growth 3YN/A
PM growth 5YN/A
GM growth 3Y-29.82%
GM growth 5Y-32.85%
TWO Yearly Profit, Operating, Gross MarginsTWO Yearly Profit, Operating, Gross MarginsYearly Profit, Operating, Gross Margins 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 0 50 -50 100 150

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2

2. TWO Health Analysis

2.1 Basic Checks

  • TWO has more shares outstanding than it did 1 year ago.
  • The number of shares outstanding for TWO has been increased compared to 5 years ago.
  • The debt/assets ratio for TWO is higher compared to a year ago.
TWO Yearly Shares OutstandingTWO Yearly Shares OutstandingYearly Shares Outstanding 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 20M 40M 60M 80M 100M
TWO Yearly Total Debt VS Total AssetsTWO Yearly Total Debt VS Total AssetsYearly Total Debt VS Total Assets 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 10B 20B 30B

2.2 Solvency

  • Based on the Altman-Z score of -1.26, 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 -1.26, TWO is doing worse than 97.06% of the companies in the same industry.
  • TWO has a debt to FCF ratio of 96.24. This is a negative value and a sign of low solvency as TWO would need 96.24 years to pay back of all of its debts.
  • TWO's Debt to FCF ratio of 96.24 is fine compared to the rest of the industry. TWO outperforms 64.71% of its industry peers.
  • TWO has a Debt/Equity ratio of 4.79. This is a high value indicating a heavy dependency on external financing.
  • TWO has a Debt to Equity ratio (4.79) which is in line with its industry peers.
Industry RankSector Rank
Debt/Equity 4.79
Debt/FCF 96.24
Altman-Z -1.26
ROIC/WACCN/A
WACCN/A
TWO Yearly LT Debt VS Equity VS FCFTWO Yearly LT Debt VS Equity VS FCFYearly LT Debt VS Equity VS FCF 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2B 4B 6B

2.3 Liquidity

  • A Current Ratio of 0.16 indicates that TWO may have some problems paying its short term obligations.
  • TWO has a Current ratio (0.16) which is comparable to the rest of the industry.
  • TWO has a Quick Ratio of 0.16. This is a bad value and indicates that TWO is not financially healthy enough and could expect problems in meeting its short term obligations.
  • With a Quick ratio value of 0.16, TWO perfoms like the industry average, outperforming 58.82% of the companies in the same industry.
Industry RankSector Rank
Current Ratio 0.16
Quick Ratio 0.16
TWO Yearly Current Assets VS Current LiabilitesTWO Yearly Current Assets VS Current LiabilitesYearly Current Assets VS Current Liabilites 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 5B 10B 15B 20B 25B

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WACCDebt/EquityHow to determine the health of a companyAltman-Z scoreShow peers with great health

5

3. TWO Growth Analysis

3.1 Past

  • The Earnings Per Share has grown by an impressive 107.27% over the past year.
  • The earnings per share for TWO have been decreasing by -18.24% on average. This is quite bad
  • Looking at the last year, TWO shows a very negative growth in Revenue. The Revenue has decreased by -60.58% in the last year.
  • The Revenue has been decreasing by -6.73% on average over the past years.
EPS 1Y (TTM)107.27%
EPS 3Y-23.03%
EPS 5Y-18.24%
EPS Q2Q%30%
Revenue 1Y (TTM)-60.58%
Revenue growth 3Y-6.73%
Revenue growth 5YN/A
Sales Q2Q%55.61%

3.2 Future

  • TWO is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 8.55% yearly.
  • The Revenue is expected to grow by 10.63% on average over the next years. This is quite good.
EPS Next Y-6.97%
EPS Next 2Y8.55%
EPS Next 3YN/A
EPS Next 5YN/A
Revenue Next Year22.65%
Revenue Next 2Y10.63%
Revenue Next 3YN/A
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.
  • The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.
TWO Yearly Revenue VS EstimatesTWO Yearly Revenue VS EstimatesYearly Revenue VS Estimates 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 0 500M -500M 1B -1B
TWO Yearly EPS VS EstimatesTWO Yearly EPS VS EstimatesYearly EPS VS Estimates 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 0 2 4 6 8

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5

4. TWO Valuation Analysis

4.1 Price/Earnings Ratio

  • A Price/Earnings ratio of 9.65 indicates a reasonable valuation of TWO.
  • 70.59% of the companies in the same industry are more expensive than TWO, based on the Price/Earnings ratio.
  • When comparing the Price/Earnings ratio of TWO to the average of the S&P500 Index (27.42), we can say TWO is valued rather cheaply.
  • TWO is valuated reasonably with a Price/Forward Earnings ratio of 10.37.
  • TWO's Price/Forward Earnings is on the same level as the industry average.
  • When comparing the Price/Forward Earnings ratio of TWO to the average of the S&P500 Index (22.24), we can say TWO is valued rather cheaply.
Industry RankSector Rank
PE 9.65
Fwd PE 10.37
TWO Price Earnings VS Forward Price EarningsTWO Price Earnings VS Forward Price Earnings ChartPrice Earnings - Forward Price Earnings PE FPE 20 40 60 80

4.2 Price Multiples

  • Based on the Price/Free Cash Flow ratio, TWO is valued a bit cheaper than 70.59% of the companies in the same industry.
Industry RankSector Rank
P/FCF 12.98
EV/EBITDA N/A
TWO Per share dataTWO EPS, Sales, OCF, FCF, BookValue per sharePer Share Data Per Share 5 10 15

4.3 Compensation for Growth

PEG (NY)N/A
PEG (5Y)N/A
EPS Next 2Y8.55%
EPS Next 3YN/A

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Price/EarningsPrice/FCFFCF per shareEV/EBITDAPEG RATIOShow best valued peers

4

5. TWO Dividend Analysis

5.1 Amount

  • TWO has a Yearly Dividend Yield of 12.82%, which is a nice return.
  • Compared to an average industry Dividend Yield of 12.70, TWO has a dividend in line with its industry peers.
  • Compared to an average S&P500 Dividend Yield of 1.81, TWO pays a better dividend.
Industry RankSector Rank
Dividend Yield 12.82%

5.2 History

  • The dividend of TWO decreases each year by -12.03%.
  • TWO has paid a dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)-12.03%
Div Incr Years0
Div Non Decr Years0
TWO Yearly Dividends per shareTWO Yearly Dividends per shareYearly Dividends per share 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 20 40 60 80

5.3 Sustainability

  • TWO has negative earnings and hence a negative payout ratio. The dividend may be in danger.
DP-43.74%
EPS Next 2Y8.55%
EPS Next 3YN/A
TWO Yearly Income VS Free CF VS DividendTWO Yearly Income VS Free CF VS DividendYearly Income VS Free CF VS Dividend 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 0 500M -500M 1B -1B -1.5B

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TWO Fundamentals: All Metrics, Ratios and Statistics

TWO HARBORS INVESTMENT CORP

NYSE:TWO (4/24/2026, 8:12:11 PM)

After market: 11 0 (0%)

11

0 (0%)

Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupFinancial Services
GICS IndustryMortgage Real Estate Investment Trusts (REITs)"
Earnings (Last)02-02
Earnings (Next)04-28
Inst Owners73.99%
Inst Owner Change-0.19%
Ins Owners0.99%
Ins Owner Change16.44%
Market Cap1.15B
Revenue(TTM)618.61M
Net Income(TTM)-508.40M
Analysts52.5
Price Target12.06 (9.64%)
Short Float %7.21%
Short Ratio1.9
Dividend
Industry RankSector Rank
Dividend Yield 12.82%
Yearly Dividend2.13
Dividend Growth(5Y)-12.03%
DP-43.74%
Div Incr Years0
Div Non Decr Years0
Ex-Date04-02
Surprises & Revisions
EPS beat(2)0
Avg EPS beat(2)-16.05%
Min EPS beat(2)-30.43%
Max EPS beat(2)-1.67%
EPS beat(4)0
Avg EPS beat(4)-23.3%
Min EPS beat(4)-37.05%
Max EPS beat(4)-1.67%
EPS beat(8)0
Avg EPS beat(8)-40.96%
EPS beat(12)0
Avg EPS beat(12)-60.16%
EPS beat(16)1
Avg EPS beat(16)-48.82%
Revenue beat(2)2
Avg Revenue beat(2)6.56%
Min Revenue beat(2)5.25%
Max Revenue beat(2)7.87%
Revenue beat(4)4
Avg Revenue beat(4)16.61%
Min Revenue beat(4)5.25%
Max Revenue beat(4)33.5%
Revenue beat(8)4
Avg Revenue beat(8)-19.31%
Revenue beat(12)4
Avg Revenue beat(12)-4460.38%
Revenue beat(16)7
Avg Revenue beat(16)-3088.62%
PT rev (1m)-3.47%
PT rev (3m)8.49%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-21.39%
EPS NY rev (1m)-10.56%
EPS NY rev (3m)-26.87%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)15.55%
Revenue NY rev (1m)0%
Revenue NY rev (3m)-4.85%
Valuation
Industry RankSector Rank
PE 9.65
Fwd PE 10.37
P/S 1.87
P/FCF 12.98
P/OCF 12.98
P/B 0.65
P/tB 0.65
EV/EBITDA N/A
EPS(TTM)1.14
EY10.36%
EPS(NY)1.06
Fwd EY9.64%
FCF(TTM)0.85
FCFY7.71%
OCF(TTM)0.85
OCFY7.71%
SpS5.9
BVpS17.05
TBVpS17.05
PEG (NY)N/A
PEG (5Y)N/A
Graham Number20.9099 (90.09%)
Profitability
Industry RankSector Rank
ROA -4.68%
ROE -28.44%
ROCE N/A
ROIC N/A
ROICexc N/A
ROICexgc N/A
OM N/A
PM (TTM) N/A
GM 18.58%
FCFM 14.37%
ROA(3y)-1.27%
ROA(5y)-0.27%
ROE(3y)-7.87%
ROE(5y)-2.09%
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 3YN/A
ROICexgc growth 5YN/A
ROICexc growth 3YN/A
ROICexc growth 5YN/A
OM growth 3YN/A
OM growth 5YN/A
PM growth 3YN/A
PM growth 5YN/A
GM growth 3Y-29.82%
GM growth 5Y-32.85%
F-Score4
Asset Turnover0.06
Health
Industry RankSector Rank
Debt/Equity 4.79
Debt/FCF 96.24
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 0.16
Quick Ratio 0.16
Altman-Z -1.26
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)107.27%
EPS 3Y-23.03%
EPS 5Y-18.24%
EPS Q2Q%30%
EPS Next Y-6.97%
EPS Next 2Y8.55%
EPS Next 3YN/A
EPS Next 5YN/A
Revenue 1Y (TTM)-60.58%
Revenue growth 3Y-6.73%
Revenue growth 5YN/A
Sales Q2Q%55.61%
Revenue Next Year22.65%
Revenue Next 2Y10.63%
Revenue Next 3YN/A
Revenue Next 5YN/A
EBIT growth 1Y-146.05%
EBIT growth 3YN/A
EBIT growth 5YN/A
EBIT Next YearN/A
EBIT Next 3YN/A
EBIT Next 5YN/A
FCF growth 1Y-55.76%
FCF growth 3Y-47.75%
FCF growth 5Y-32.44%
OCF growth 1Y-55.76%
OCF growth 3Y-47.75%
OCF growth 5Y-32.44%

TWO HARBORS INVESTMENT CORP / TWO Fundamental Analysis FAQ

Can you provide the ChartMill fundamental rating for TWO HARBORS INVESTMENT CORP?

ChartMill assigns a fundamental rating of 3 / 10 to TWO.


What is the valuation status for TWO stock?

ChartMill assigns a valuation rating of 5 / 10 to TWO HARBORS INVESTMENT CORP (TWO). This can be considered as Fairly Valued.


How profitable is TWO HARBORS INVESTMENT CORP (TWO) stock?

TWO HARBORS INVESTMENT CORP (TWO) has a profitability rating of 2 / 10.


Can you provide the expected EPS growth for TWO stock?

The Earnings per Share (EPS) of TWO HARBORS INVESTMENT CORP (TWO) is expected to decline by -6.97% in the next year.


How sustainable is the dividend of TWO HARBORS INVESTMENT CORP (TWO) stock?

The dividend rating of TWO HARBORS INVESTMENT CORP (TWO) is 4 / 10 and the dividend payout ratio is -43.74%.