Two Harbors Investment Corp

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TWO : NYSE : Financial
$8.73 | %
Today's Range: 8.66 - 8.75
Avg. Daily Volume: 2,726,100
07/22/16 - 4:02 PM ET

Financial Analysis


TWO HARBORS INVESTMENT CORP's gross profit margin for the first quarter of its fiscal year 2016 has 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 17.00% from the same quarter last year.

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Income Statement Q1 FY16 Q1 FY15
Net Sales ($mil)121.86282.19
EBITDA ($mil)83.69244.4
EBIT ($mil)83.37244.08
Net Income ($mil)-88.9394.79


Balance Sheet Q1 FY16 Q1 FY15
Cash & Equiv. ($mil)1035.973471.5
Total Assets ($mil)16684.6121678.06
Total Debt ($mil)12999.4817120.45
Equity ($mil)3370.694061.5


Profitability Q1 FY16 Q1 FY15
Gross Profit Margin68.6886.61
EBITDA Margin68.6886.61
Operating Margin68.4186.5
Sales Turnover0.050.04
Return on Assets1.841.34
Return on Equity9.157.16
Debt Q1 FY16 Q1 FY15
Current Ratio0.00.0
Debt/Capital0.790.81
Interest Expense41.3633.5
Interest Coverage2.027.29


Share Data Q1 FY16 Q1 FY15
Shares outstanding (mil)347.56366.57
Div / share0.230.26
EPS-0.250.26
Book value / share9.711.08
Institutional Own % n/a n/a
Avg Daily Volume2845134.02857142.0

Valuation


HOLD. TWO HARBORS INVESTMENT CORP's P/E ratio indicates a significant discount compared to an average of 50.69 for the Real Estate Investment Trusts (REITs) industry and a significant discount compared to the S&P 500 average of 25.03. For additional comparison, its price-to-book ratio of 0.87 indicates a significant discount versus the S&P 500 average of 2.80 and a significant discount versus the industry average of 4.06. 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 9.98 Peers 50.69   TWO NM Peers 23.97

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 9.02 Peers 55.51   TWO NM Peers 4.97

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 0.87 Peers 4.06   TWO 6.25 Peers 60.24

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 3.60 Peers 8.76   TWO -5.11 Peers 47.02

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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