| Market Capitalization (Millions $) |
1,283 |
| Shares
Outstanding (Millions) |
105 |
| Employees |
486 |
| Revenues (TTM) (Millions $) |
713 |
| Net Income (TTM) (Millions $) |
-343 |
| Cash Flow (TTM) (Millions $) |
62 |
| Capital Exp. (TTM) (Millions $) |
0 |
Business Description
Two Harbors Investment Corp is a real estate investment trust (REIT) based in Minnesota, United States. The company primarily invests in residential mortgage-backed securities (RMBS) and other mortgage-related assets. Two Harbors' investment strategy is focused on generating attractive risk-adjusted returns through disciplined asset selection, hedging, and funding strategies. Here is a more detailed overview of the company:
Investment Portfolio:
Two Harbors' investment portfolio primarily consists of RMBS and mortgage-related assets, with a focus on agency RMBS. The company also invests in non-agency RMBS, prime jumbo loans, and credit-sensitive residential mortgage assets. In addition, it has exposure to commercial real estate debt, servicing rights, and other related assets.
RMBS is a type of mortgage-backed security where pools of mortgages are packaged together and sold to investors. The cash flows from the underlying mortgages are used to pay interest and principal to investors in the RMBS. Agency RMBS are securities that are guaranteed by the US government-sponsored enterprises Fannie Mae, Freddie Mac, and Ginnie Mae. As a result, these securities typically have lower credit risk but come with lower yields.
Non-agency RMBS, on the other hand, are not guaranteed and usually have a higher credit risk. Prime jumbo loans refer to mortgages that are too large to be guaranteed by Fannie Mae or Freddie Mac and are typically made to borrowers with high credit scores.
Operating Model:
Two Harbors generates revenue primarily through the interest income it earns from its mortgage-related assets. The company typically acquires these assets through its wholly-owned subsidiary, Two Harbors Investment Management. The subsidiary's team of experienced investment professionals is responsible for sourcing, analyzing, and acquiring investments for the portfolio.
Two Harbors' investment strategy involves active portfolio management and risk mitigation. The company employs a range of hedging strategies to manage interest rate and credit risk in its portfolio. This includes the use of interest rate swaps, options, and other derivatives. Management also monitors funding costs closely and uses a mix of repo financing and other sources of funding to optimize its cost of capital.
Dividend and Share Price:
Two Harbors typically distributes a portion of its net income to shareholders in the form of dividends. The company has a history of paying consistent and attractive dividends, which has helped to support its share price. As of August 2021, the company's dividend yield was around 8.5%, which is higher than the industry average.
Two Harbors' share price can be influenced by a range of factors, including interest rate movements, changes in the credit market, and shifts in the demand for mortgage-related assets. The company's share price has historically been more volatile than other REITs due to the complexity of its investment strategy and the use of derivatives.
Conclusion:
Two Harbors Investment Corp is a REIT with a focus on investing in residential mortgage-backed securities and other mortgage-related assets. The company's investment strategy involves active portfolio management, hedging, and funding strategies to generate attractive risk-adjusted returns. Two Harbors has a history of paying consistent and attractive dividends, and its share price can be influenced by a range of factors. As with any investment, investors should carefully consider their investment objectives and risk tolerance before investing in Two Harbors or any other security.
Company Address: 1601 Utica Avenue South Zagreb 55416 City of Zagreb
Company Phone Number: 453-4100 Stock Exchange / Ticker: NYSE TWO
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