Two Harbors Investment Corp. (TWO) has reported better-than-expected quarterly earnings for the fourth quarter of 2021. The real estate investment trust focuses on investing in, financing, and managing agency RMBS, non-Agency securities, mortgage servicing rights, and other financial assets.
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Earnings of $0.22 per share surpassed analysts’ expectations of $0.21 per share. The company had reported earnings of $0.30 per share in the same quarter last year.
Net interest income in the fourth quarter declined 74.3% year-over-year to $12.8 million due to lower interest income. Other income grew 22.5% during the quarter to $106.2 million.
As of December 31, 2021, Two Harbors’ portfolio comprised $9.4 billion of Agency residential mortgage-backed securities, Agency Derivatives and MSR, including their associated notional hedges. Also, it held $4.2 billion bond equivalent value of net long-to-be-announced securities.
Two Harbors’ President, CEO and Chief Investment Officer, Bill Greenberg, said, “With the Federal Reserve firmly on the path of quantitative tightening, we are well-positioned to deploy capital into a more constructive investing environment and are optimistic about the forward outlook for Two Harbors and our paired Agency + MSR strategy.”
Analysts’ Recommendation
The rest of the Street is cautiously optimistic about the stock with a Moderate Buy consensus rating based on 1 Buy and 1 Hold. The average Two Harbors price target of $6.25 implies 17% upside potential from current levels. Shares of the company have declined 7% over the past year.
Positive Sentiment
TipRanks’ Stock Investors tool shows that investors currently have a Very Negative stance on Two Harbors, as 12.1% of investors on TipRanks increased their exposure to TWO stock over the past 30 days.
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