Two Harbors Investments Corp (NYSE:TWO) Given Consensus Recommendation of "Reduce" by Brokerages

Key Points

• Consensus "Reduce": Nine analysts give Two Harbors a consensus rating of "Reduce" (2 sell, 7 hold) with an average 1‑year target of $12.45, and several recent downgrades including JPMorgan cutting to underweight (PT $11).
• Earnings and valuation weakness: The REIT missed quarterly EPS ($0.26 vs. $0.30 expected), reported a negative net margin (-109.9%) and a negative P/E (-2.27), while the stock trades around $11 with a 1‑year range of $8.78–$14.17 and a $1.17B market cap.
• High dividend yield: Two Harbors pays a quarterly dividend of $0.34 (annualized $1.36), implying a 12.2% yield on recent levels.

Two Harbors Investments Corp (NYSE:TWO - Get Free Report) has earned an average rating of "Reduce" from the nine research firms that are presently covering the firm, MarketBeat reports. Two equities research analysts have rated the stock with a sell recommendation and seven have given a hold recommendation to the company. The average 1-year target price among brokerages that have issued ratings on the stock in the last year is $12.45.

Several equities analysts have commented on the stock. JPMorgan Chase & Co. downgraded shares of Two Harbors Investments from a "neutral" rating to an "underweight" rating and decreased their price objective for the company from $12.50 to $11.00 in a report on Thursday. Zacks Research upgraded shares of Two Harbors Investments from a "strong sell" rating to a "hold" rating in a report on Monday, April 6th. Weiss Ratings reiterated a "sell (d)" rating on shares of Two Harbors Investments in a report on Monday, December 29th. UBS Group downgraded shares of Two Harbors Investments from a "buy" rating to a "neutral" rating and upped their price objective for the company from $11.00 to $14.00 in a report on Friday, January 23rd. Finally, Compass Point downgraded shares of Two Harbors Investments from a "buy" rating to a "neutral" rating in a research note on Friday, March 27th.

Institutional Investors Weigh In On Two Harbors Investments

Institutional investors and hedge funds have recently bought and sold shares of the company. Mowery & Schoenfeld Wealth Management LLC bought a new stake in Two Harbors Investments during the third quarter worth about $25,000. Quarry LP lifted its position in Two Harbors Investments by 695.6% during the third quarter. Quarry LP now owns 3,421 shares of the real estate investment trust's stock worth $34,000 after purchasing an additional 2,991 shares during the period. Smartleaf Asset Management LLC lifted its position in Two Harbors Investments by 34.5% during the fourth quarter. Smartleaf Asset Management LLC now owns 3,825 shares of the real estate investment trust's stock worth $40,000 after purchasing an additional 981 shares during the period. Advisory Services Network LLC bought a new stake in Two Harbors Investments during the third quarter worth about $42,000. Finally, CWM LLC lifted its position in Two Harbors Investments by 456.0% during the third quarter. CWM LLC now owns 5,465 shares of the real estate investment trust's stock worth $54,000 after purchasing an additional 4,482 shares during the period. Institutional investors own 64.19% of the company's stock.

Two Harbors Investments Stock Performance

NYSE TWO opened at $11.12 on Friday. The company has a current ratio of 1.09, a quick ratio of 1.09 and a debt-to-equity ratio of 1.09. The firm's fifty day moving average price is $10.62 and its two-hundred day moving average price is $10.65. Two Harbors Investments has a 1 year low of $8.78 and a 1 year high of $14.17. The firm has a market capitalization of $1.17 billion, a P/E ratio of -2.27 and a beta of 1.08.

Two Harbors Investments (NYSE:TWO - Get Free Report) last posted its quarterly earnings results on Monday, February 2nd. The real estate investment trust reported $0.26 earnings per share (EPS) for the quarter, missing the consensus estimate of $0.30 by ($0.04). Two Harbors Investments had a positive return on equity of 12.00% and a negative net margin of 109.90%.The firm had revenue of $182.18 million for the quarter, compared to the consensus estimate of ($15.44) million. As a group, research analysts anticipate that Two Harbors Investments will post 0.81 EPS for the current year.

Two Harbors Investments Announces Dividend

The firm also recently declared a quarterly dividend, which was paid on Wednesday, April 15th. Investors of record on Thursday, April 2nd were paid a $0.34 dividend. The ex-dividend date was Thursday, April 2nd. This represents a $1.36 annualized dividend and a dividend yield of 12.2%. Two Harbors Investments's dividend payout ratio is -27.81%.

About Two Harbors Investments

Two Harbors Investments Corp. is a mortgage real estate investment trust (mREIT) that primarily invests in residential mortgage-backed securities (RMBS) issued or guaranteed by government-sponsored enterprises, as well as non-agency residential mortgage loans, mortgage servicing rights and credit risk transfer securities. The company seeks to generate attractive risk-adjusted returns for its shareholders by employing leverage to enhance net interest income derived from its portfolio of high-quality fixed-income assets.

Headquartered in Minneapolis, Minnesota, Two Harbors operates through a self-managed platform that combines portfolio management, risk-management and securitization expertise.

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