Head-To-Head Analysis: Global Self Storage (NASDAQ:SELF) vs. Two Harbors Investment (NYSE:TWO)

Global Self Storage (NASDAQ:SELF) and Two Harbors Investment (NYSE:TWO) are both small-cap finance companies, but which is the superior stock? We will compare the two companies based on the strength of their earnings, valuation, profitability, risk, analyst recommendations, dividends and institutional ownership.

Dividends

Global Self Storage pays an annual dividend of $0.29 per share and has a dividend yield of 5.2%. Two Harbors Investment pays an annual dividend of $1.80 per share and has a dividend yield of 16.6%. Global Self Storage pays out 138.1% 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 pays out -352.9% of its earnings in the form of a dividend. Two Harbors Investment has increased its dividend for 1 consecutive years. Two Harbors Investment is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Valuation and Earnings

This table compares Global Self Storage and Two Harbors Investment”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Global Self Storage	$12.62 million	4.99	$2.94 million	$0.21	26.43
Two Harbors Investment	$216.08 million	5.23	$298.17 million	($0.51)	-21.28

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

Analyst Recommendations

This is a summary of current recommendations for Global Self Storage and Two Harbors Investment, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Global Self Storage	0	0	1	0	3.00
Two Harbors Investment	0	3	4	0	2.57

Global Self Storage currently has a consensus price target of $6.50, indicating a potential upside of 17.12%. Two Harbors Investment has a consensus price target of $13.29, indicating a potential upside of 22.39%. Given Two Harbors Investment’s higher possible upside, analysts plainly believe Two Harbors Investment is more favorable than Global Self Storage.

Volatility and Risk

Global Self Storage has a beta of 0.03, indicating that its share price is 97% less volatile than the S&P 500. Comparatively, Two Harbors Investment has a beta of 1.33, indicating that its share price is 33% more volatile than the S&P 500.

Institutional and Insider Ownership

28.9% of Global Self Storage shares are owned by institutional investors. Comparatively, 64.2% of Two Harbors Investment shares are owned by institutional investors. 8.0% of Global Self Storage shares are owned by insiders. Comparatively, 0.7% of Two Harbors Investment shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Profitability

This table compares Global Self Storage and Two Harbors Investment’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Global Self Storage	25.47%	6.55%	4.73%
Two Harbors Investment	66.24%	6.52%	0.81%

Summary

Two Harbors Investment beats Global Self Storage on 11 of the 17 factors compared between the two stocks.

About Global Self Storage

Global Self Storage is a self-administered and self-managed REIT that owns, operates, manages, acquires, and redevelops self-storage properties. The company's self-storage properties are designed to offer affordable, easily accessible and secure storage space for residential and commercial customers. Through its wholly owned subsidiaries, the company owns and/or manages 13 self-storage properties in Connecticut, Illinois, Indiana, New York, Ohio, Pennsylvania, South Carolina, and Oklahoma.

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.