Critical Analysis: Two Harbors Investment (NYSE:TWO) vs. CBL & Associates Properties (OTCMKTS:CBLAQ)

CBL & Associates Properties (OTCMKTS:CBLAQ) and Two Harbors Investment (NYSE:TWO) are both finance companies, but which is the better business? We will contrast the two companies based on the strength of their analyst recommendations, earnings, risk, valuation, profitability, institutional ownership and dividends.

Analyst Ratings

This is a summary of recent recommendations and price targets for CBL & Associates Properties and Two Harbors Investment, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
CBL & Associates Properties	0	0	0	0	0.00
Two Harbors Investment	0	3	4	0	2.57

Two Harbors Investment has a consensus price target of $13.96, indicating a potential upside of 3.20%. Given Two Harbors Investment’s stronger consensus rating and higher possible upside, analysts plainly believe Two Harbors Investment is more favorable than CBL & Associates Properties.

Earnings and Valuation

This table compares CBL & Associates Properties and Two Harbors Investment”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
CBL & Associates Properties	$535.29 million	N/A	$6.55 million	N/A	N/A
Two Harbors Investment	$510.75 million	2.75	$298.17 million	$2.11	6.41

Two Harbors Investment has lower revenue, but higher earnings than CBL & Associates Properties.

Institutional & Insider Ownership

64.2% of Two Harbors Investment shares are held by institutional investors. 20.1% of CBL & Associates Properties shares are held by company insiders. Comparatively, 0.6% of Two Harbors Investment shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Profitability

This table compares CBL & Associates Properties and Two Harbors Investment’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
CBL & Associates Properties	6.19%	10.34%	1.38%
Two Harbors Investment	66.24%	6.52%	0.81%

Summary

Two Harbors Investment beats CBL & Associates Properties on 6 of the 10 factors compared between the two stocks.

About CBL & Associates Properties

CBL & Associates Properties, Inc. is a real estate investment trust, which owns and operates retail properties. The firm engages in owning, developing, acquiring, leasing, managing and operating regional shopping malls, open-air centers, community centers and office properties. It operates through Malls and All Other segments. Its properties include Malls, Associated Centers, Community Centers, Office Buildings, Construction Properties and Mortgages. The company was founded on July 13, 1993 and is headquartered in Chattanooga, TN.

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.