TWO HARBORS INVESTMENT CORP (TWO) Stock Fundamental Analysis
USA - NYSE:TWO - US90187B8046 - REIT
9.82 USD
+0.05 (+0.51%)
9.82 USD
0 (0%)
We assign a fundamental rating of 4 out of 10 to TWO. TWO was compared to 66 industry peers in the Mortgage Real Estate Investment Trusts (REITs)" industry. Both the profitability and financial health of TWO have multiple concerns. 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.
TWO had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
TWO has a worse Return On Assets (-2.71%) than 78.79% of its industry peers.
Looking at the Return On Equity, with a value of -18.64%, TWO is doing worse than 87.88% of the companies in the same industry.
| 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.
TWO's Operating Margin has improved in the last couple of years.
TWO's Gross Margin of 13.76% is on the low side compared to the rest of the industry. TWO is outperformed by 68.18% of its industry peers.
TWO's Gross Margin has improved in the last couple of years.
TWO does not have Profit Margin and Operating Margin available, so we won't be analyzing them here.
| 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
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 -1.23. This is a bad value and indicates that TWO is not financially healthy and even has some risk of bankruptcy.
Looking at the Altman-Z score, with a value of -1.23, TWO is doing worse than 96.97% of the companies in the same industry.
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.
The Debt to FCF ratio of TWO (36.73) is better than 75.76% of its industry peers.
A Debt/Equity ratio of 5.40 is on the high side and indicates that TWO has dependencies on debt financing.
With a Debt to Equity ratio value of 5.40, TWO perfoms like the industry average, outperforming 45.45% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 5.4 | ||
| Debt/FCF | 36.73 | ||
| Altman-Z | -1.23 |
ROIC/WACCN/A
WACCN/A
2.3 Liquidity
A Current Ratio of 0.11 indicates that TWO may have some problems paying its short term obligations.
TWO has a Current ratio (0.11) which is comparable to the rest of the industry.
TWO has a Quick 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.
Looking at the Quick ratio, with a value of 0.11, TWO is in line with its industry, outperforming 42.42% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.11 | ||
| Quick Ratio | 0.11 |
3. Growth
3.1 Past
TWO shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 750.00%, which is quite impressive.
TWO shows a very negative growth in Earnings Per Share. Measured over the last years, the EPS has been decreasing by -36.86% yearly.
TWO shows a very negative growth in Revenue. In the last year, the Revenue has decreased by -54.30%.
TWO shows a decrease in Revenue. Measured over the last years, the Revenue has been decreasing by -1.54% yearly.
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%48.71%
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
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
With a Price/Earnings ratio of 11.55, the valuation of TWO can be described as very reasonable.
65.15% of the companies in the same industry are more expensive than TWO, based on the Price/Earnings ratio.
TWO is valuated cheaply when we compare the Price/Earnings ratio to 26.83, which is the current average of the S&P500 Index.
The Price/Forward Earnings ratio is 6.79, which indicates a rather cheap valuation of TWO.
Based on the Price/Forward Earnings ratio, TWO is valued cheaply inside the industry as 83.33% of the companies are valued more expensively.
When comparing the Price/Forward Earnings ratio of TWO to the average of the S&P500 Index (22.82), we can say TWO is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 11.55 | ||
| Fwd PE | 6.79 |
4.2 Price Multiples
TWO's Price/Free Cash Flow ratio is rather cheap when compared to the industry. TWO is cheaper than 96.97% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 3.69 | ||
| 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.
A more expensive valuation may be justified as TWO's earnings are expected to grow with 43.82% in the coming years.
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 17.12%, which is a nice return.
TWO's Dividend Yield is rather good when compared to the industry average which is at 12.94. TWO pays more dividend than 92.42% of the companies in the same industry.
TWO's Dividend Yield is rather good when compared to the S&P500 average which is at 2.34.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 17.12% |
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-67.29%
EPS Next 2Y62.14%
EPS Next 3Y43.82%
9.82
+0.05 (+0.51%)
Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupFinancial Services
GICS IndustryMortgage Real Estate Investment Trusts (REITs)"
Earnings (Last)
Earnings (Next)
Inst Owners73.23%
Inst Owner Change-0.08%
Ins Owners0.85%
Ins Owner Change2.05%
Market Cap1.02B
Revenue(TTM)667.99M
Net Income(TTM)-351649000
Analysts74.29
Price Target11.65 (18.64%)
Short Float %7.24%
Short Ratio3.93
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 17.12% |
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)26.65%
Min Revenue beat(2)19.81%
Max Revenue beat(2)33.5%
Revenue beat(4)2
Avg Revenue beat(4)0.19%
Min Revenue beat(4)-30.77%
Max Revenue beat(4)33.5%
Revenue beat(8)2
Avg Revenue beat(8)-94.26%
Revenue beat(12)3
Avg Revenue beat(12)-4387.67%
Revenue beat(16)7
Avg Revenue beat(16)-3062.42%
PT rev (1m)0%
PT rev (3m)-12.74%
EPS NQ rev (1m)-0.36%
EPS NQ rev (3m)-5.44%
EPS NY rev (1m)7.86%
EPS NY rev (3m)-11.16%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)2.86%
Revenue NY rev (1m)0%
Revenue NY rev (3m)6.14%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 11.55 | ||
| Fwd PE | 6.79 | ||
| P/S | 1.53 | ||
| P/FCF | 3.69 | ||
| P/OCF | 3.69 | ||
| P/B | 0.54 | ||
| P/tB | 0.54 | ||
| EV/EBITDA | N/A |
EPS(TTM)0.85
EY8.66%
EPS(NY)1.45
Fwd EY14.72%
FCF(TTM)2.66
FCFY27.09%
OCF(TTM)2.66
OCFY27.09%
SpS6.41
BVpS18.11
TBVpS18.11
PEG (NY)0.09
PEG (5Y)N/A
Graham Number18.61
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
ROICexgc growth 3YN/A
ROICexgc 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%48.71%
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%
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 8 / 10 to TWO HARBORS INVESTMENT CORP (TWO). This can be considered as Undervalued.
What is the profitability of TWO stock?
TWO HARBORS INVESTMENT CORP (TWO) has a profitability rating of 3 / 10.
Can you provide the PE and PB ratios for TWO stock?
The Price/Earnings (PE) ratio for TWO HARBORS INVESTMENT CORP (TWO) is 11.55 and the Price/Book (PB) ratio is 0.54.
How sustainable is the dividend of TWO HARBORS INVESTMENT CORP (TWO) stock?
The dividend rating of TWO HARBORS INVESTMENT CORP (TWO) is 5 / 10 and the dividend payout ratio is -67.29%.