Reviewing Two Harbors Investment (NYSE:TWO) and OUTFRONT Media (NYSE:OUT)

Two Harbors Investment (NYSE:TWO) and OUTFRONT Media (NYSE:OUT) are both finance companies, but which is the better business? We will compare the two companies based on the strength of their risk, valuation, institutional ownership, earnings, analyst recommendations, dividends and profitability.

Dividends

Two Harbors Investment pays an annual dividend of $1.80 per share and has a dividend yield of 15.2%. OUTFRONT Media pays an annual dividend of $1.20 per share and has a dividend yield of 6.4%. Two Harbors Investment pays out -37.3% of its earnings in the form of a dividend. OUTFRONT Media pays out 87.6% 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 Investment is clearly the better dividend stock, given its higher yield and lower payout ratio.

Valuation and Earnings

This table compares Two Harbors Investment and OUTFRONT Media”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Two Harbors Investment	$480.36 million	2.55	-$106.37 million	($4.82)	-2.46
OUTFRONT Media	$1.82 billion	1.72	-$430.40 million	$1.37	13.74

Two Harbors Investment has higher earnings, but lower revenue than OUTFRONT Media. Two Harbors Investment is trading at a lower price-to-earnings ratio than OUTFRONT Media, indicating that it is currently the more affordable of the two stocks.

Volatility and Risk

Two Harbors Investment has a beta of 1.85, suggesting that its share price is 85% more volatile than the S&P 500. Comparatively, OUTFRONT Media has a beta of 1.96, suggesting that its share price is 96% more volatile than the S&P 500.

Analyst Recommendations

This is a summary of current ratings and target prices for Two Harbors Investment and OUTFRONT Media, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Two Harbors Investment	0	3	4	0	2.57
OUTFRONT Media	0	3	2	0	2.40

Two Harbors Investment currently has a consensus price target of $13.71, suggesting a potential upside of 15.78%. OUTFRONT Media has a consensus price target of $19.25, suggesting a potential upside of 2.28%. Given Two Harbors Investment’s stronger consensus rating and higher possible upside, analysts plainly believe Two Harbors Investment is more favorable than OUTFRONT Media.

Institutional & Insider Ownership

64.2% of Two Harbors Investment shares are held by institutional investors. 0.6% of Two Harbors Investment shares are held by company insiders. Comparatively, 1.2% of OUTFRONT Media shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Profitability

This table compares Two Harbors Investment and OUTFRONT Media’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Two Harbors Investment	-87.84%	4.45%	0.55%
OUTFRONT Media	13.30%	40.33%	4.54%

About Two Harbors Investment

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 OUTFRONT Media

OUTFRONT leverages the power of technology, location, and creativity to connect brands with consumers outside of their homes through one of the largest and most diverse sets of billboard, transit, and mobile assets in North America. Through its technology platform, OUTFRONT will fundamentally change the ways advertisers engage audiences on-the-go.