Two Harbors Investment Corp.
Two Harbors Investment Corp. Fundamental Analysis
Two Harbors Investment Corp. (TWO-PB) shows moderate financial fundamentals with a PE ratio of -2.47, profit margin of -1.19%, and ROE of -23.93%. The company generates $0.4B in annual revenue with moderate year-over-year growth of 3.43%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of -107.0/100 based on profitability, valuation, growth, and balance sheet metrics. The F grade reflects weak fundamentals and significant financial concerns.
Fundamental Health Score
We analyze TWO-PB's fundamental strength across five key dimensions:
Efficiency Score
WeakTWO-PB struggles to generate sufficient returns from assets.
Valuation Score
ExcellentTWO-PB trades at attractive valuation levels.
Growth Score
WeakTWO-PB faces weak or negative growth trends.
Financial Health Score
WeakTWO-PB carries high financial risk with limited liquidity.
Profitability Score
WeakTWO-PB struggles to sustain strong margins.
Key Financial Metrics
Is TWO-PB Expensive or Cheap?
P/E Ratio
TWO-PB trades at -2.47 times earnings. This suggests potential undervaluation.
PEG Ratio
When adjusting for growth, TWO-PB's PEG of 0.02 indicates potential undervaluation.
Price to Book
The market values Two Harbors Investment Corp. at 0.63 times its book value. This may indicate undervaluation.
EV/EBITDA
Enterprise value stands at -15.66 times EBITDA. This is generally considered low.
How Well Does TWO-PB Make Money?
Net Profit Margin
For every $100 in sales, Two Harbors Investment Corp. keeps $-1.19 as profit after all expenses.
Operating Margin
Core operations generate 1.10 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $-23.93 in profit for every $100 of shareholder equity.
ROA
Two Harbors Investment Corp. generates $-4.18 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
Two Harbors Investment Corp. generates limited operating cash flow of $-28.18M, signaling weaker underlying cash strength.
Free Cash Flow
Two Harbors Investment Corp. generates weak or negative free cash flow of $-129.62M, restricting financial flexibility.
FCF Per Share
Each share generates $-1.25 in free cash annually.
FCF Yield
TWO-PB converts -11.45% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
-2.47
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
0.02
vs 25 benchmark
P/B Ratio
Price to book value ratio
0.63
vs 25 benchmark
P/S Ratio
Price to sales ratio
2.97
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
4.79
vs 25 benchmark
Current Ratio
Current assets to current liabilities
0.97
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
-0.24
vs 25 benchmark
ROA
Return on assets percentage
-0.04
vs 25 benchmark
ROCE
Return on capital employed
0.13
vs 25 benchmark
How TWO-PB Stacks Against Its Sector Peers
| Metric | TWO-PB Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | -2.47 | 24.23 | Better (Cheaper) |
| ROE | -23.93% | 659.00% | Weak |
| Net Margin | -119.32% | 4497.00% | Weak |
| Debt/Equity | 4.79 | -22.14 (disorted) | Distorted |
| Current Ratio | 0.97 | 13.87 | Weak Liquidity |
| ROA | -4.18% | -1390.00% (disorted) | Weak |
TWO-PB outperforms its industry in 1 out of 6 key metrics, but lagging in ROE.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews Two Harbors Investment Corp.'s 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
72.18%
Industry Style: Income, Inflation Hedge, REIT
High GrowthEPS CAGR
-49.77%
Industry Style: Income, Inflation Hedge, REIT
DecliningFCF CAGR
-87.70%
Industry Style: Income, Inflation Hedge, REIT
Declining