Head-To-Head Comparison: Camden Property Trust (CPT) versus Two Harbors Investments Corp (NYSE:TWO)
Camden Property Trust (NYSE: CPT) and Two Harbors Investments Corp (NYSE:TWO) are both mid-cap finance companies, but which is the better stock? We will contrast the two companies based on the strength of their dividends, institutional ownership, valuation, analyst recommendations, risk, earnings and profitabiliy.
Camden Property Trust pays an annual dividend of $3.00 per share and has a dividend yield of 3.4%. Two Harbors Investments Corp pays an annual dividend of $1.04 per share and has a dividend yield of 10.6%. Camden Property Trust pays out 67.1% of its earnings in the form of a dividend. Two Harbors Investments Corp pays out 75.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Two Harbors Investments Corp has increased its dividend for 6 consecutive years. Two Harbors Investments Corp is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
This table compares Camden Property Trust and Two Harbors Investments Corp’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Camden Property Trust||46.10%||13.17%||6.81%|
|Two Harbors Investments Corp||74.05%||9.81%||1.55%|
Institutional & Insider Ownership
92.2% of Camden Property Trust shares are owned by institutional investors. Comparatively, 71.0% of Two Harbors Investments Corp shares are owned by institutional investors. 4.7% of Camden Property Trust shares are owned by insiders. Comparatively, 1.2% of Two Harbors Investments Corp shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.
Volatility and Risk
Camden Property Trust has a beta of 0.37, meaning that its stock price is 63% less volatile than the S&P 500. Comparatively, Two Harbors Investments Corp has a beta of 0.59, meaning that its stock price is 41% less volatile than the S&P 500.
Earnings & Valuation
This table compares Camden Property Trust and Two Harbors Investments Corp’s revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Camden Property Trust||$897.76 million||8.73||$506.29 million||$4.47||20.01|
|Two Harbors Investments Corp||$639.60 million||5.37||$478.02 million||$1.37||7.19|
Camden Property Trust has higher revenue and earnings than Two Harbors Investments Corp. Two Harbors Investments Corp is trading at a lower price-to-earnings ratio than Camden Property Trust, indicating that it is currently the more affordable of the two stocks.
This is a summary of recent ratings for Camden Property Trust and Two Harbors Investments Corp, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Camden Property Trust||0||4||7||0||2.64|
|Two Harbors Investments Corp||0||3||6||0||2.67|
Camden Property Trust presently has a consensus target price of $88.73, suggesting a potential downside of 0.81%. Two Harbors Investments Corp has a consensus target price of $9.69, suggesting a potential downside of 1.59%. Given Camden Property Trust’s higher probable upside, research analysts plainly believe Camden Property Trust is more favorable than Two Harbors Investments Corp.
Camden Property Trust beats Two Harbors Investments Corp on 12 of the 17 factors compared between the two stocks.
About Camden Property Trust
Camden Property Trust is a real estate investment trust (REIT). The Company is engaged in the ownership, management, development, redevelopment, acquisition and construction of multifamily apartment communities. As of December 31, 2016, the Company owned interests in, operated, or were developing 159 multifamily properties, which consisted of 55,366 apartment homes across the United States. The Company also owns land holdings, which it may develop into multifamily communities. The Company’s properties consist of mid-rise buildings or two and three story buildings in a landscaped setting and provide residents with a range of amenities common to multifamily rental properties. The 152 operating properties in which the Company owned interests and operated, as of December 31, 2016, averaged 953 square feet of living area per apartment home. As of December 31, 2016, 137 of its operating properties had over 200 apartment homes.
About Two Harbors Investments Corp
Two Harbors Investment Corp. is a real estate investment trust. The Company is focused on investing in, financing and managing residential mortgage-backed securities (RMBS), mortgage servicing rights (MSR), commercial real estate and other financial assets (collectively known as target assets). Its investment objective is to provide attractive risk-adjusted total return to its stockholders over the long-term, primarily through dividends and secondarily through capital appreciation. The Company focuses on managing various associated risks, including interest rate, prepayment, credit, mortgage spread and financing risk. The Company finances its RMBS and commercial real estate assets through short- and long-term borrowings structured as repurchase agreements and advances from the Federal Home Loan Bank of Des Moines, or the FHLB. It also finances its MSR through revolving credit facilities.
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