Two Harbors Investment Corp

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TWO : NYSE : Financial
$8.96 | %
Today's Range: 0.00 - 0.00
Avg. Daily Volume: 1,964,800
08/24/16 - 4:02 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, underperforming compared to the average company in its industry.

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
Debt/Capital0.830.78
Interest Expense66.680.0
Interest Coverage0.520.0


Share Data Q2 FY16 Q2 FY15
Shares outstanding (mil)347.62367.53
Div / share0.230.26
EPS-0.050.6
Book value / share9.8310.81
Institutional Own % n/a n/a
Avg Daily Volume2046638.02633322.0

Valuation


SELL. The current P/E ratio indicates a significant discount compared to an average of 60.73 for the Real Estate Investment Trusts (REITs) industry and a significant premium compared to the S&P 500 average of 25.30. For additional comparison, its price-to-book ratio of 0.91 indicates a significant discount versus the S&P 500 average of 2.83 and a significant discount versus the industry average of 3.83. The price-to-sales ratio is well above the S&P 500 average, but well 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.


Price/Earnings
1 2 3 4 5
premium   discount
  Price/Cash Flow
1 2 3 4 5
premium   discount
TWO 44.95 Peers 60.73   TWO NM Peers 21.89

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

TWO is trading at a significant discount 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.

 
Price/Projected
Earnings
1 2 3 4 5
premium   discount
  Price to
Earnings/Growth
1 2 3 4 5
premium   discount
TWO 9.46 Peers 60.64   TWO NM Peers 3.76

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.

 
Price/Book
1 2 3 4 5
premium   discount
  Earnings Growth
1 2 3 4 5
lower   higher
TWO 0.91 Peers 3.83   TWO -84.50 Peers 9.51

Discount. 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 significant discount to 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.

 
Price/Sales
1 2 3 4 5
premium   discount
  Sales Growth
1 2 3 4 5
premium   discount
TWO 4.80 Peers 8.45   TWO -28.87 Peers 15.00

Discount. 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 significant discount to 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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