Two Harbors Investment Corp

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TWO : NYSE : Financial
$8.53 -0.04 | -0.47%
Today's Range: 8.53 - 8.62
Avg. Daily Volume: 1,699,700
09/30/16 - 4:03 PM ET

Financial Analysis

TWO HARBORS INVESTMENT CORP's gross profit margin for the second quarter of its fiscal year 2016 has significantly decreased when compared to the same period a year ago. Sales and net income fell significantly; although net income growth outperformed the average competitor in its industry, revenue growth did not.

During the same period, stockholders' equity ("net worth") has decreased by 13.93% from the same quarter last year.

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Income Statement Q2 FY16 Q2 FY15
Net Sales ($mil)72.42241.52
EBITDA ($mil)35.27204.95
EBIT ($mil)34.93204.62
Net Income ($mil)-16.98221.5

Balance Sheet Q2 FY16 Q2 FY15
Cash & Equiv. ($mil)1055.351344.48
Total Assets ($mil)20740.4418447.72
Total Debt ($mil)16781.7114137.54
Equity ($mil)3418.073971.57

Profitability Q2 FY16 Q2 FY15
Gross Profit Margin48.784.86
EBITDA Margin48.784.86
Operating Margin48.2484.72
Sales Turnover0.030.05
Return on Assets0.332.56
Return on Equity2.0411.9
Debt Q2 FY16 Q2 FY15
Current Ratio0.00.0
Interest Expense66.680.0
Interest Coverage0.520.0

Share Data Q2 FY16 Q2 FY15
Shares outstanding (mil)347.62367.53
Div / share0.230.26
Book value / share9.8310.81
Institutional Own % n/a n/a
Avg Daily Volume1860173.02857229.0


SELL. TWO HARBORS INVESTMENT CORP's P/E ratio indicates a significant premium compared to an average of 27.49 for the Mortgage REITs industry and a significant premium compared to the S&P 500 average of 25.19. Conducting a second comparison, its price-to-book ratio of 0.91 indicates a significant discount versus the S&P 500 average of 2.82 and a discount versus the industry average of 0.96. The current price-to-sales ratio is well above the S&P 500 average and above the industry average, indicating a premium. The valuation analysis reveals that, TWO HARBORS INVESTMENT CORP seems to be trading at a premium to investment alternatives within the industry.

1 2 3 4 5
premium   discount
  Price/Cash Flow
1 2 3 4 5
premium   discount
TWO 44.85 Peers 27.49   TWO NM Peers 13.67

Premium. A higher P/E ratio than its peers can signify a more expensive stock or higher growth expectations.

TWO is trading at a significant premium to its peers.


Neutral. The P/CF ratio, a stock’s price divided by the company's cash flow from operations, is useful for comparing companies with different capital requirements or financing structures.

TWO's P/CF is negative making the measure meaningless.

1 2 3 4 5
premium   discount
  Price to
1 2 3 4 5
premium   discount
TWO 9.44 Peers 22.28   TWO NM Peers 1.75

Discount. A lower price-to-projected earnings ratio than its peers can signify a less expensive stock or lower future growth expectations.

TWO is trading at a significant discount to its peers.


Neutral. The PEG ratio is the stock’s P/E divided by the consensus estimate of long-term earnings growth. Faster growth can justify higher price multiples.

TWO's negative PEG ratio makes this valuation measure meaningless.

1 2 3 4 5
premium   discount
  Earnings Growth
1 2 3 4 5
lower   higher
TWO 0.91 Peers 0.96   TWO -84.50 Peers -819.41

Average. A lower price-to-book ratio makes a stock more attractive to investors seeking stocks with lower market values per dollar of equity on the balance sheet.

TWO is trading at a valuation on par with its peers.


Higher. Elevated earnings growth rates can lead to capital appreciation and justify higher price-to-earnings ratios.

TWO is expected to have an earnings growth rate that significantly exceeds its peers.

1 2 3 4 5
premium   discount
  Sales Growth
1 2 3 4 5
premium   discount
TWO 4.79 Peers 4.50   TWO -28.87 Peers 6.22

Average. In the absence of P/E and P/B multiples, the price-to-sales ratio can display the value investors are placing on each dollar of sales.

TWO is trading at a valuation on par with its industry on this measurement.


Lower. A sales growth rate that trails the industry implies that a company is losing market share.

TWO significantly trails its peers on the basis of sales growth



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