Two Harbors Investments (NYSE:TWO) & DigitalBridge Group (NYSE:DBRG) Financial Analysis

Two Harbors Investments (NYSE:TWO) and DigitalBridge Group (NYSE:DBRG) are both finance companies, but which is the superior business? We will compare the two businesses based on the strength of their risk, institutional ownership, dividends, valuation, earnings, profitability and analyst recommendations.

Insider and Institutional Ownership

64.2% of Two Harbors Investments shares are owned by institutional investors. Comparatively, 92.7% of DigitalBridge Group shares are owned by institutional investors. 0.6% of Two Harbors Investments shares are owned by company insiders. Comparatively, 3.6% of DigitalBridge Group shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Dividends

Two Harbors Investments pays an annual dividend of $1.36 per share and has a dividend yield of 12.7%. DigitalBridge Group pays an annual dividend of $0.04 per share and has a dividend yield of 0.3%. Two Harbors Investments pays out -54.4% of its earnings in the form of a dividend. DigitalBridge Group pays out 66.7% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Two Harbors Investments has raised its dividend for 1 consecutive years. Two Harbors Investments is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Ratings

This is a breakdown of current ratings for Two Harbors Investments and DigitalBridge Group, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Two Harbors Investments	1	7	1	0	2.00
DigitalBridge Group	1	6	4	0	2.27

Two Harbors Investments presently has a consensus price target of $11.96, suggesting a potential upside of 11.81%. DigitalBridge Group has a consensus price target of $16.22, suggesting a potential upside of 5.37%. Given Two Harbors Investments’ higher probable upside, equities research analysts plainly believe Two Harbors Investments is more favorable than DigitalBridge Group.

Profitability

This table compares Two Harbors Investments and DigitalBridge Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Two Harbors Investments	-44.10%	11.92%	1.32%
DigitalBridge Group	N/A	4.78%	2.29%

Volatility and Risk

Two Harbors Investments has a beta of 1.19, suggesting that its stock price is 19% more volatile than the S&P 500. Comparatively, DigitalBridge Group has a beta of 1.69, suggesting that its stock price is 69% more volatile than the S&P 500.

Earnings & Valuation

This table compares Two Harbors Investments and DigitalBridge Group”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Two Harbors Investments	$450.15 million	2.47	$298.17 million	($2.50)	-4.28
DigitalBridge Group	$228.14 million	12.33	$70.52 million	$0.06	256.58

Two Harbors Investments has higher revenue and earnings than DigitalBridge Group. Two Harbors Investments is trading at a lower price-to-earnings ratio than DigitalBridge Group, indicating that it is currently the more affordable of the two stocks.

Summary

DigitalBridge Group beats Two Harbors Investments on 10 of the 17 factors compared between the two stocks.

About Two Harbors Investments

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. It 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 St. Louis Park, Minnesota.

About DigitalBridge Group

DigitalBridge is an infrastructure investment firm specializing in digital infrastructure assets. They provide services to institutional investors. They primarily invest in data centers, cell towers, fiber networks, small cells, and edge infrastructure. DigitalBridge Group, Inc. was founded in 1991 and is headquartered in Boca Raton, Florida with additional offices in Los Angles, California, and New York New York.