Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model. NEW YORK ( TheStreet) -- Two Harbors Investment (NYSE: TWO) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, attractive valuation levels, expanding profit margins, solid stock price performance and compelling growth in net income. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity.
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- TWO's very impressive revenue growth greatly exceeded the industry average of 13.4%. Since the same quarter one year prior, revenues leaped by 255.5%. Growth in the company's revenue appears to have helped boost the earnings per share.
- Powered by its strong earnings growth of 64.86% and other important driving factors, this stock has surged by 25.93% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, although almost any stock can fall in a broad market decline, TWO should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
- The gross profit margin for TWO HARBORS INVESTMENT CORP is currently very high, coming in at 92.60%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 86.71% significantly outperformed against the industry average.
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Real Estate Investment Trusts (REITs) industry. The net income increased by 268.1% when compared to the same quarter one year prior, rising from $51.43 million to $189.30 million.
-- Written by a member of TheStreet Ratings Staff