Two Harbors Investment: Assessing Valuation After Modest Rebound

Two Harbors Investment (TWO) has seen a 4% rebound over the past month, but its year-to-date return remains negative. The stock's recent share price return and modest 1-year total shareholder return raise questions about its valuation. With a double-digit implied discount to analyst targets, TWO screens cheap against mortgage REIT peers, but not against its own fundamentals. The price-to-sales multiple is below the industry average, but above the estimated fair ratio, suggesting potential multiple compression ahead.