-->

Is This 17% Yielder a Safe Harbor?

Post a Comment
Shield

AN OXFORD CLUB PUBLICATION

Wealthy Retirement

View in browser

SPONSORED

"Why Don't You Offer Your Stuff for Free?"

Internet Troll
 

Internet trolls are always saying "If you're so good... why don't you give away your trades for free?"

Well... challenge accepted.

For one week... we're going to PROVE we are the real deal.

You can join us as we analyze the market LIVE...

And get all our market intelligence and real-time trading recommendations.

Plus... we'll do special trainings every single day.

It's all yours FREE...

Just RSVP Right Here (No Cost, No Obligation)

Is This 17% Yielder a Safe Harbor... or Will Investors Get Shipwrecked?

Marc Lichtenfeld, Chief Income Strategist, The Oxford Club

Marc Lichtenfeld

Two Harbors Investment (NYSE: TWO) is a 14-year-old New York-based mortgage real estate investment trust (REIT). It invests in residential mortgages.

The stock has a giant 17% dividend yield, which is quite attractive to income investors. But can investors rely on the yield staying that large going forward?

When we analyze mortgage REITs, we use a metric called net interest income (NII). Mortgage REITs borrow money and then lend it out at a higher interest rate. NII is the difference between how much the company earns in interest (minus expenses) and how much it pays in interest.

Unfortunately for Two Harbors, its NII has been evaporating.

Since 2019, the company's NII has plummeted 86%. And this year's NII is forecast to drop another 63% from last year's total.

Chart: Two Harbors' Sinking Net Interest Income
 

This will be a big problem when it comes to paying the company's dividend.

SPONSORED

Biden's Plan to Confiscate Your Cash?

Burning Money

On March 9, 2022, President Biden quietly signed Executive Order 14067.

This Order could pave the way for Democrats holding onto power in 2024.

In fact, they could control America indefinitely.

A former advisor to the CIA and Pentagon believes this order could allow for legal government surveillance of all US citizens; total control over your bank accounts and purchases; and the ability to silence all dissenting voices for good.

To protect your freedom and your wealth, see his dark warning now.

Last year, Two Harbors paid shareholders more than $290 million in dividends - that's nearly eight times more cash than it brought in.

To say that's unsustainable would be like saying San Francisco is a bit untidy these days - a dramatic understatement.

Though the dividend has been cut recently, Two Harbors is still projected to pay out $232 million in dividends this year, despite the fact that NII is expected to come in at less than $14 million.

Unsurprisingly, as NII has fallen, so has the company's dividend.

Chart: Two Harbors' Annual Dividend
 

Two Harbors has cut its dividend five times over the past 10 years.

Considering the company's dismal record of maintaining its dividend and its putrid NII performance, not only is the dividend unsafe, but another dividend reduction is a sure thing.

Click the button below to reveal Two Harbors' dividend safety rating...

SAFETY NET SAYS...
The Oxford Club and Opportunity Travel & Events present Explore the Wonders of Israel (October 15-25, 2023), Jordan (October 25-29, 2023) and Egypt (October 28-31, 2023)

A Shocking Announcement in August Could Send One Stock Rocketing Higher...

Should You Get Out of Stocks Now?

SPONSORED

***UPGRADED: Our "Last Great Value Stock" Trading "for Just Pennies"

Thumbs Up Market
 

A new blockbuster report by The Motley Fool featured what we've been calling "The Last Great Value Stock."

Fool's Christopher Ruane wrote, "Shares look quite cheap at the moment. After all, they're in penny stock territory... they offer good value - and I have been buying them for my portfolio because of that."

InvestingCube says, "Share price is a bargain."

And Zacks Investment Research just upgraded the stock.

So what is this cheap, bargain-priced, upgraded stock?

>>> Get the urgent details here before the price surges higher.

Related Posts

There is no other posts in this category.

Post a Comment

Subscribe Our Newsletter