Two Harbors Investment Corp

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TWO : NYSE : Financial
$10.11 up 0.07 | 0.7%
Today's Range: 10.05 - 10.22
Avg. Daily Volume: 2662300.0
09/19/17 - 4:01 PM ET

Financial Analysis


TWO HARBORS INVESTMENT CORP's gross profit margin for the second quarter of its fiscal year 2017 has significantly increased when compared to the same period a year ago. The company has grown sales and net income significantly, outpacing the average growth rates of competitors within its industry.

At the same time, stockholders' equity ("net worth") has remained virtually unchanged only increasing by 4.98% from the same quarter last year.

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Income Statement Q2 FY17 Q2 FY16
Net Sales ($mil)227.6572.42
EBITDA ($mil)185.1635.27
EBIT ($mil)184.934.93
Net Income ($mil)8.62-16.98


Balance Sheet Q2 FY17 Q2 FY16
Cash & Equiv. ($mil)901.441055.35
Total Assets ($mil)23781.0320740.44
Total Debt ($mil)19758.2316781.71
Equity ($mil)3588.423418.07


Profitability Q2 FY17 Q2 FY16
Gross Profit Margin81.3448.7
EBITDA Margin81.3348.7
Operating Margin81.2248.24
Sales Turnover0.040.03
Return on Assets2.260.33
Return on Equity14.922.04
Debt Q2 FY17 Q2 FY16
Current Ratio0.00.0
Debt/Capital0.850.83
Interest Expense167.4866.68
Interest Coverage1.10.52


Share Data Q2 FY17 Q2 FY16
Shares outstanding (mil)348.98347.62
Div / share0.260.23
EPS0.01-0.05
Book value / share10.289.83
Institutional Own % n/a n/a
Avg Daily Volume2729557.02726970.0

Valuation


HOLD. This stock's P/E ratio indicates a discount compared to an average of 7.81 for the Mortgage REITs industry and a significant discount compared to the S&P 500 average of 24.88. Conducting a second comparison, its price-to-book ratio of 0.98 indicates a significant discount versus the S&P 500 average of 3.10 and a discount versus the industry average of 1.02. 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 6.52 Peers 7.81   TWO 4.60 Peers 20.38

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.

 
Price/Projected
Earnings
1 2 3 4 5
premium   discount
  Price to
Earnings/Growth
1 2 3 4 5
premium   discount
TWO 10.14 Peers 10.02   TWO 0.94 Peers 0.64

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.

 

Premium. 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 premium to its peers.

 
Price/Book
1 2 3 4 5
premium   discount
  Earnings Growth
1 2 3 4 5
lower   higher
TWO 0.98 Peers 1.02   TWO 670.00 Peers 242.88

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.

 
Price/Sales
1 2 3 4 5
premium   discount
  Sales Growth
1 2 3 4 5
premium   discount
TWO 4.01 Peers 4.90   TWO 34.23 Peers 19.54

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 discount to its industry on this measurement.

 

Higher. A sales growth rate that exceeds the industry implies that a company is gaining market share.

TWO has a sales growth rate that significantly exceeds its peers.

 

 

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