TWO HARBORS INVESTMENT CORP (TWO) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:TWO - US90187B8046 - REIT
10.56 USD
-0.03 (-0.28%)
10.6 USD
+0.04 (+0.38%)
We assign a fundamental rating of 4 out of 10 to TWO. TWO was compared to 68 industry peers in the Mortgage Real Estate Investment Trusts (REITs)" industry. While TWO is still in line with the averages on profitability rating, there are concerns on its financial health. TWO is not valued too expensively and it also shows a decent growth rate.
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.
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.
1.2 Ratios
Looking at the Return On Assets, with a value of -2.23%, TWO is doing worse than 79.41% of the companies in the same industry.
TWO has a worse Return On Equity (-13.70%) than 82.35% of its industry peers.
The Return On Invested Capital of TWO (0.23%) is worse than 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.
Looking at the Operating Margin, with a value of 2.96%, TWO is doing worse than 72.06% of the companies in the same industry.
TWO's Operating Margin has improved in the last couple of years.
Looking at the Gross Margin, with a value of 42.34%, TWO belongs to the top 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.
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 -1.14, 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 -1.14, TWO is doing worse than 97.06% of the companies in the same industry.
A Debt/Equity ratio of 4.76 is on the high side and indicates that TWO has dependencies on debt financing.
TWO's Debt to Equity ratio of 4.76 is in line compared to the rest of the industry. TWO outperforms 52.94% of 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
A Current Ratio of 0.17 indicates that TWO may have some problems paying its short term obligations.
TWO has a Current ratio (0.17) which is in line with its industry peers.
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 Year42.68%
Revenue Next 2Y22.49%
Revenue Next 3Y16.42%
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.
4. Valuation
4.1 Price/Earnings Ratio
TWO is valuated reasonably with a Price/Earnings ratio of 9.78.
Based on the Price/Earnings ratio, TWO is valued a bit cheaper than 70.59% of the companies in the same industry.
The average S&P500 Price/Earnings ratio is at 26.77. TWO is valued rather cheaply when compared to this.
The Price/Forward Earnings ratio is 7.28, which indicates a rather cheap valuation of TWO.
79.41% of the companies in the same industry are more expensive than TWO, based on the Price/Forward Earnings ratio.
The average S&P500 Price/Forward Earnings ratio is at 23.35. TWO is valued rather cheaply when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 9.78 | ||
| Fwd PE | 7.28 |
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)0.08
PEG (5Y)N/A
EPS Next 2Y62.37%
EPS Next 3Y39.13%
5. Dividend
5.1 Amount
TWO has a Yearly Dividend Yield of 9.06%, which is a nice return.
TWO's Dividend Yield is slightly below the industry average, which is at 10.99.
TWO's Dividend Yield is rather good when compared to the S&P500 average which is at 2.00.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 9.06% |
5.2 History
The dividend of TWO decreases each year by -22.81%.
TWO has been paying a dividend for at least 10 years, so it has 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%
10.56
-0.03 (-0.28%)
Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupFinancial Services
GICS IndustryMortgage Real Estate Investment Trusts (REITs)"
Earnings (Last)
Earnings (Next)
Inst Owners71.25%
Inst Owner Change-3.95%
Ins Owners0.84%
Ins Owner Change9.74%
Market Cap1.10B
Revenue(TTM)933.29M
Net Income(TTM)-242.81M
Analysts72.31
Price Target11.12 (5.3%)
Short Float %8.56%
Short Ratio3.79
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 9.06% |
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)-3.15%
EPS NY rev (3m)0.33%
Revenue NQ rev (1m)4.43%
Revenue NQ rev (3m)34.11%
Revenue NY rev (1m)6.92%
Revenue NY rev (3m)11.22%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 9.78 | ||
| Fwd PE | 7.28 | ||
| P/S | 1.18 | ||
| P/FCF | N/A | ||
| P/OCF | N/A | ||
| P/B | 0.62 | ||
| P/tB | 0.62 | ||
| EV/EBITDA | N/A |
EPS(TTM)1.08
EY10.23%
EPS(NY)1.45
Fwd EY13.73%
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.
Can you provide the valuation status for TWO HARBORS INVESTMENT CORP?
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 9.78 and the Price/Book (PB) ratio is 0.62.
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 -95.7%.