Reviewing Two Harbors Investment (NYSE:TWO) & BRT Apartments (NYSE:BRT)
Two Harbors Investment (NYSE:TWO – Get Rating) and BRT Apartments (NYSE:BRT – Get Rating) are both small-cap finance companies, but which is the superior investment? We will contrast the two businesses based on the strength of their earnings, risk, analyst recommendations, profitability, valuation, dividends and institutional ownership.
Analyst Recommendations
This is a breakdown of recent ratings for Two Harbors Investment and BRT Apartments, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Two Harbors Investment | 0 | 5 | 1 | 0 | 2.17 |
| BRT Apartments | 0 | 1 | 3 | 0 | 2.75 |
Two Harbors Investment currently has a consensus price target of $5.81, suggesting a potential upside of 11.91%. BRT Apartments has a consensus price target of $27.33, suggesting a potential upside of 25.15%. Given BRT Apartments’ stronger consensus rating and higher probable upside, analysts clearly believe BRT Apartments is more favorable than Two Harbors Investment.
Valuation and Earnings
This table compares Two Harbors Investment and BRT Apartments’ revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Two Harbors Investment | $168.60 million | 10.59 | $187.23 million | $0.37 | 14.03 |
| BRT Apartments | $32.06 million | 12.67 | $29.11 million | $2.46 | 8.88 |
Two Harbors Investment has higher revenue and earnings than BRT Apartments. BRT Apartments is trading at a lower price-to-earnings ratio than Two Harbors Investment, indicating that it is currently the more affordable of the two stocks.
Profitability
This table compares Two Harbors Investment and BRT Apartments’ net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Two Harbors Investment | 147.67% | 16.21% | 2.61% |
| BRT Apartments | 121.97% | 22.09% | 10.49% |
Risk & Volatility
Two Harbors Investment has a beta of 1.65, meaning that its stock price is 65% more volatile than the S&P 500. Comparatively, BRT Apartments has a beta of 1.28, meaning that its stock price is 28% more volatile than the S&P 500.
Institutional & Insider Ownership
68.7% of Two Harbors Investment shares are owned by institutional investors. Comparatively, 28.3% of BRT Apartments shares are owned by institutional investors. 0.4% of Two Harbors Investment shares are owned by company insiders. Comparatively, 37.9% of BRT Apartments shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.
Dividends
Two Harbors Investment pays an annual dividend of $0.68 per share and has a dividend yield of 13.1%. BRT Apartments pays an annual dividend of $0.92 per share and has a dividend yield of 4.2%. Two Harbors Investment pays out 183.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. BRT Apartments pays out 37.4% of its earnings in the form of a dividend. BRT Apartments has raised its dividend for 1 consecutive years.
Summary
BRT Apartments beats Two Harbors Investment on 10 of the 17 factors compared between the two stocks.
About Two Harbors Investment (Get Rating)
Two Harbors Investment Corp. operates as a real estate investment trust (REIT) that focuses on investing in, financing, and managing residential mortgage-backed securities (RMBS), non-agency securities, mortgage servicing rights, and other financial assets in the United States. Its target assets include agency RMBS collateralized by fixed rate mortgage loans, adjustable rate mortgage loans, and hybrid adjustable-rate mortgage (ARMs); and other assets, such as financial and mortgage-related assets, including non-agency securities and non-hedging transactions. The company qualifies as a REIT for federal income tax purposes. As a REIT, the company must distribute at least 90% of annual taxable income to its stockholders. Two Harbors Investment Corp. was incorporated in 2009 and is headquartered in Minnetonka, Minnesota.
About BRT Apartments (Get Rating)
BRT is a real estate investment trust that owns, operates and develops multi-family properties.
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