Two Harbors Investment Corp

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TWO : NYSE : Financial
$9.835 -0.005 | -0.051%
Today's Range: 9.81 - 9.9
Avg. Daily Volume: 3043500.0
07/24/17 - 11:35 AM ET

Financial Analysis

TWO HARBORS INVESTMENT CORP's gross profit margin for the first quarter of its fiscal year 2017 has increased when compared to the same period a year ago. Sales and net income have grown, and although the growth in revenues has outpaced the average competitor within the industry, the net income growth has not.

During the same period, stockholders' equity ("net worth") has increased by 6.87% from the same quarter last year.

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Income Statement Q1 FY17 Q1 FY16
Net Sales ($mil)146.11121.86
EBITDA ($mil)113.2783.69
EBIT ($mil)112.9883.37
Net Income ($mil)71.99-88.93

Balance Sheet Q1 FY17 Q1 FY16
Cash & Equiv. ($mil)786.771035.97
Total Assets ($mil)24270.8416684.61
Total Debt ($mil)20451.7412999.48
Equity ($mil)3602.563370.69

Profitability Q1 FY17 Q1 FY16
Gross Profit Margin77.5268.68
EBITDA Margin77.5268.68
Operating Margin77.3368.41
Sales Turnover0.030.05
Return on Assets2.111.84
Return on Equity14.279.15
Debt Q1 FY17 Q1 FY16
Current Ratio0.00.0
Interest Expense65.51166.84
Interest Coverage1.720.5

Share Data Q1 FY17 Q1 FY16
Shares outstanding (mil)348.91347.56
Div / share0.250.23
Book value / share10.339.7
Institutional Own % n/a n/a
Avg Daily Volume3019136.02470948.0


HOLD. This stock's P/E ratio indicates a discount compared to an average of 8.57 for the Mortgage REITs industry and a significant discount compared to the S&P 500 average of 24.66. Conducting a second comparison, its price-to-book ratio of 0.95 indicates a significant discount versus the S&P 500 average of 3.07 and a discount versus the industry average of 1.01. The current price-to-sales ratio is well above the S&P 500 average, but below the industry average. Upon assessment of these and other key valuation criteria, TWO HARBORS INVESTMENT CORP proves to trade at a discount to investment alternatives within the industry.

1 2 3 4 5
premium   discount
  Price/Cash Flow
1 2 3 4 5
premium   discount
TWO 6.59 Peers 8.57   TWO 6.37 Peers 76.44

Discount. A lower P/E ratio than its peers can signify a less expensive stock or lower growth expectations.

TWO is trading at a discount to its peers.


Discount. 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 is trading at a significant discount to its peers.

1 2 3 4 5
premium   discount
  Price to
1 2 3 4 5
premium   discount
TWO 9.25 Peers 9.82   TWO 1.11 Peers 3.43

Average. An average price-to-projected earnings ratio can signify an industry neutral stock price and average future growth expectations.

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


Discount. 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 trades at a significant discount to its peers.

1 2 3 4 5
premium   discount
  Earnings Growth
1 2 3 4 5
lower   higher
TWO 0.95 Peers 1.01   TWO 74.11 Peers 223.16

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.


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

However, TWO is expected to significantly trail its peers on the basis of its earnings growth rate.

1 2 3 4 5
premium   discount
  Sales Growth
1 2 3 4 5
premium   discount
TWO 4.74 Peers 4.95   TWO -12.40 Peers 8.98

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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