Two Harbors Investment Corp. (TWO) Q3 2024 Earnings Call Transcript
Two Harbors Investment Corp. (NYSE:TWO ) Q3 2024 Earnings Conference Call October 29, 2024 9:00 AM ET Company Participants Maggie Karr - Head, Investor Relations Bill Greenberg - President and CEO Nick Letica - Chief Investment Officer William Dellal - Interim Chief Financial Officer Conference Call Participants Doug Harter - UBS Bose George - KBW Jason Stewart - Janney Rick Shane - JPMorgan Trevor Cranston - Citizens JMP Eric Hagen - BTIG Harsh Hemnani - Green Street Operator Please stand by. Good morning.
Here's What Key Metrics Tell Us About Two Harbors Investments (TWO) Q3 Earnings
While the top- and bottom-line numbers for Two Harbors Investments (TWO) give a sense of how the business performed in the quarter ended September 2024, it could be worth looking at how some of its key metrics compare to Wall Street estimates and year-ago values.
Key Factors Influencing Two Harbors Investment's Q3 Earnings
TWO's third-quarter 2024 results are expected to benefit from lower mortgage rates, though the negative NII remains a challenge.
Two Harbors Investment Preferreds: Defining The Opportunity In Declining Interest Rates
Investors are considering transferring reserves from money markets to bonds due to declining interest rates. Two Harbors Investment Corporation's preferred stocks (TWO.PR.A, TWO.PR.B, TWO.PR.C) are analyzed for investment opportunities and risks. TWO.PR.B is currently trading at the steepest discount to par and may outperform in declining interest rate scenarios.
Two Harbors Preferreds Look Much Better Than The Common
Two Harbors preferreds have significantly outperformed the common shares over the past five years. Structural aspects of mREITs like the requirement to pay out 90% of taxable income and the lack of real estate depreciation, favor preferreds over common shares. The conversion to a floating rate for Two Harbors preferreds offers the potential for significant capital appreciation.
Two Harbors: The Series B Preferred Shares Offer The Best Value
Two Harbors Investment Corporation is an mREIT focused on agency residential mortgage-backed securities and mortgage servicing rights. The company's series B preferred shares have outperformed the iShares Preferred and Income Securities ETF in 2024. Two Harbors' preferred dividend coverage is strong both from a net income and common equity perspective.
Natixis Advisors L.P. Has $258,000 Stock Holdings in Two Harbors Investment Corp. (NYSE:TWO)
Natixis Advisors L.P. trimmed its position in Two Harbors Investment Corp. (NYSE:TWO – Free Report) by 91.7% in the fourth quarter, according to its most recent Form 13F filing with the Securities and Exchange Commission. The fund owned 18,522 shares of the real estate investment trust’s stock after selling 204,626 shares during the quarter. Natixis Advisors L.P.’s holdings in Two Harbors Investment were worth $258,000 as of its most recent filing with the Securities and Exchange Commission. Several other large investors have also modified their holdings of TWO. Zurcher Kantonalbank Zurich Cantonalbank boosted its holdings in Two Harbors Investment by 30.7% during the third quarter. Zurcher Kantonalbank Zurich Cantonalbank now owns 20,611 shares of the real estate investment trust’s stock valued at $273,000 after acquiring an additional 4,837 shares during the period. Nisa Investment Advisors LLC lifted its position in shares of Two Harbors Investment by 5.4% during the 3rd quarter. Nisa Investment Advisors LLC now owns 36,564 shares of the real estate investment trust’s stock worth $484,000 after purchasing an additional 1,872 shares during the last quarter. Jump Financial LLC bought a new stake in Two Harbors Investment during the 3rd quarter valued at approximately $227,000. Swiss National Bank grew its holdings in Two Harbors Investment by 1.0% in the 3rd quarter. Swiss National Bank now owns 212,488 shares of the real estate investment trust’s stock valued at $2,813,000 after buying an additional 2,000 shares during the last quarter. Finally, Massachusetts Financial Services Co. MA increased its position in Two Harbors Investment by 1.2% in the 3rd quarter. Massachusetts Financial Services Co. MA now owns 2,227,050 shares of the real estate investment trust’s stock worth $29,486,000 after buying an additional 26,801 shares during the period. 64.19% of the stock is owned by institutional investors. Two Harbors Investment Stock Up 0.4 % TWO opened at $13.03 on Monday. Two Harbors Investment Corp. has a fifty-two week low of $9.83 and a fifty-two week high of $14.59. The company has a debt-to-equity ratio of 0.99, a current ratio of 1.09 and a quick ratio of 1.09. The firm’s fifty day moving average price is $12.67 and its two-hundred day moving average price is $13.14. The company has a market capitalization of $1.35 billion, a P/E ratio of 7.32 and a beta of 1.85. Two Harbors Investment Announces Dividend The company also recently announced a quarterly dividend, which was paid on Monday, April 29th. Stockholders of record on Thursday, April 4th were paid a $0.45 dividend. The ex-dividend date of this dividend was Wednesday, April 3rd. This represents a $1.80 annualized dividend and a dividend yield of 13.81%. Two Harbors Investment’s dividend payout ratio is presently 101.12%. Analyst Ratings Changes Several brokerages have recently issued reports on TWO. JPMorgan Chase & Co. lowered their price objective on shares of Two Harbors Investment from $13.50 to $12.50 and set a “neutral” rating on the stock in a research note on Wednesday, April 10th. Jonestrading started coverage on shares of Two Harbors Investment in a research report on Friday, March 22nd. They set a “hold” rating for the company. TheStreet downgraded Two Harbors Investment from a “c-” rating to a “d” rating in a research report on Tuesday, January 30th. StockNews.com raised Two Harbors Investment from a “sell” rating to a “hold” rating in a report on Wednesday, May 1st. Finally, JMP Securities restated a “market outperform” rating and set a $15.00 price objective on shares of Two Harbors Investment in a research report on Thursday, April 18th. Eight investment analysts have rated the stock with a hold rating and one has assigned a buy rating to the company’s stock. According to MarketBeat.com, the stock currently has an average rating of “Hold” and an average price target of $14.57. View Our Latest Stock Report on Two Harbors Investment About Two Harbors Investment (Free Report) Two Harbors Investment Corp. invests in, finances, and manages mortgage servicing rights (MSRs), agency residential mortgage-backed securities (RMBS), and other financial assets through RoundPoint in the United States. The company target assets include agency RMBS collateralized by fixed rate mortgage loans, adjustable rate mortgage loans, hybrid mortgage loans, or derivatives; and other assets, such as financial and mortgage-related assets, including non-agency securities and non-hedging transactions. Read More Five stocks we like better than Two Harbors Investment Do Real Estate Investment Trusts Deserve a Place in Your Portfolio? 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