Comparing DigitalBridge Group (NYSE:DBRG) and Two Harbors Investments (NYSE:TWO)

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

Institutional and Insider Ownership

92.7% of DigitalBridge Group shares are held by institutional investors. Comparatively, 64.2% of Two Harbors Investments shares are held by institutional investors. 3.6% of DigitalBridge Group shares are held by insiders. Comparatively, 0.7% of Two Harbors Investments shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Volatility & Risk

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

Dividends

DigitalBridge Group pays an annual dividend of $0.04 per share and has a dividend yield of 0.3%. Two Harbors Investments pays an annual dividend of $1.36 per share and has a dividend yield of 11.1%. DigitalBridge Group pays out 66.7% of its earnings in the form of a dividend. Two Harbors Investments pays out -54.4% 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 increased 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 Recommendations

This is a summary of recent recommendations and price targets for DigitalBridge Group and Two Harbors Investments, as reported by MarketBeat.com.

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

DigitalBridge Group currently has a consensus price target of $16.22, indicating a potential upside of 5.65%. Two Harbors Investments has a consensus price target of $11.96, indicating a potential downside of 2.29%. Given DigitalBridge Group’s stronger consensus rating and higher possible upside, equities research analysts plainly believe DigitalBridge Group is more favorable than Two Harbors Investments.

Earnings & Valuation

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
DigitalBridge Group	$228.14 million	12.29	$70.52 million	$0.06	255.92
Two Harbors Investments	$450.15 million	2.83	$298.17 million	($2.50)	-4.90

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.

Profitability

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

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

Summary

DigitalBridge Group beats Two Harbors Investments on 11 of the 17 factors compared between the two stocks.

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.

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.