FBR Capital Starts Two Harbors Investment (TWO) at Outperform; Security Selection Acumen Offers Stability

FBR Capital initiates coverage on Two Harbors Investment (NYSE: TWO) with a Outperform. PT $11.50.

FBR analyst says, "We believe that management has created a dynamic and differentiated portfolio of residential mortgage-backed securities (RMBS) focused primarily on cash flow stability. Specifically, Two Harbors invests in mortgage–backed securities (MBS) with very stable prepayment characteristics while aggressively hedging interest rate risk. This investment strategy has resulted in consistent book value growth during the last four quarters, despite a volatile yield curve, and a dividend payout approaching 15%. In the current economic environment, we believe the aforementioned characteristics present an attractive risk/reward profile."

For more ratings news on Two Harbors Investment click here and for the rating history of Two Harbors Investment click here.

Shares of Two Harbors Investment closed at $10.66 yesterday.

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