RWT vs. TWO, ARI, RC, MFA, CIM, PMT, ARR, DX, NYMT, and IVR
Should you be buying Redwood Trust stock or one of its competitors? The main competitors of Redwood Trust include Two Harbors Investment (TWO), Apollo Commercial Real Estate Finance (ARI), Ready Capital (RC), MFA Financial (MFA), Chimera Investment (CIM), PennyMac Mortgage Investment Trust (PMT), ARMOUR Residential REIT (ARR), Dynex Capital (DX), New York Mortgage Trust (NYMT), and Invesco Mortgage Capital (IVR). These companies are all part of the "mortgage reits" industry.
Two Harbors Investment (NYSE:TWO) and Redwood Trust (NYSE:RWT) are both small-cap finance companies, but which is the better business? We will compare the two businesses based on the strength of their risk, community ranking, profitability, earnings, dividends, institutional ownership, media sentiment, analyst recommendations and valuation.
Redwood Trust has higher revenue and earnings than Two Harbors Investment. Two Harbors Investment is trading at a lower price-to-earnings ratio than Redwood Trust, indicating that it is currently the more affordable of the two stocks.
Two Harbors Investment received 101 more outperform votes than Redwood Trust when rated by MarketBeat users. Likewise, 67.80% of users gave Two Harbors Investment an outperform vote while only 65.36% of users gave Redwood Trust an outperform vote.
In the previous week, Redwood Trust had 8 more articles in the media than Two Harbors Investment. MarketBeat recorded 9 mentions for Redwood Trust and 1 mentions for Two Harbors Investment. Redwood Trust's average media sentiment score of 1.45 beat Two Harbors Investment's score of 0.63 indicating that Redwood Trust is being referred to more favorably in the news media.
64.2% of Two Harbors Investment shares are owned by institutional investors. Comparatively, 74.3% of Redwood Trust shares are owned by institutional investors. 0.6% of Two Harbors Investment shares are owned by insiders. Comparatively, 2.5% of Redwood Trust shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.
Two Harbors Investment has a beta of 1.86, meaning that its share price is 86% more volatile than the S&P 500. Comparatively, Redwood Trust has a beta of 1.58, meaning that its share price is 58% more volatile than the S&P 500.
Two Harbors Investment pays an annual dividend of $1.80 per share and has a dividend yield of 12.8%. Redwood Trust pays an annual dividend of $0.64 per share and has a dividend yield of 8.0%. Two Harbors Investment pays out 101.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Redwood Trust pays out 914.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Two Harbors Investment is clearly the better dividend stock, given its higher yield and lower payout ratio.
Two Harbors Investment has a net margin of 27.71% compared to Redwood Trust's net margin of 4.45%. Redwood Trust's return on equity of 4.93% beat Two Harbors Investment's return on equity.
Two Harbors Investment presently has a consensus price target of $14.90, suggesting a potential upside of 6.28%. Redwood Trust has a consensus price target of $7.81, suggesting a potential downside of 3.04%. Given Two Harbors Investment's higher possible upside, equities research analysts clearly believe Two Harbors Investment is more favorable than Redwood Trust.
Summary
Redwood Trust beats Two Harbors Investment on 11 of the 21 factors compared between the two stocks.
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This chart shows the number of new MarketBeat users adding RWT and its top 5 competitors to their watchlist. Each company is represented with a line over a 90 day period.
This chart shows the average media sentiment of NYSE and its competitors over the past 90 days as caculated by MarketBeat. The averaged score is equivalent to the following: Very Negative Sentiment <= -1.5, Negative Sentiment > -1.5 and <= -0.5, Neutral Sentiment > -0.5 and < 0.5, Positive Sentiment >= 0.5 and < 1.5, and Very Positive Sentiment >= 1.5.
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