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Two Harbors Investment Corp. Message Board

  • badger_christine badger_christine Dec 14, 2012 11:07 AM Flag

    Upcoming Dividend

    What's the guess on divy announcement. Up or down???

    Sentiment: Hold

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    • Considering the newly issued stock from the offering and warrants, and considering that 10% of TWO's capital is tied up in residential houses, the 36 cents is a little high. Last quarter, they earned only 32 cents. That was a little low becasue the money from new stock was not earning much, if any. On the other hand, the 32 cents is a weighted average, so I would not expect much more than that. Even if it's cut to 32 cents (worst case IMO), that would be very sustainable for several quarters.

      Understand that you will receive shares in SBY in about 90 days -- about 0.06 shares of SBY for every share of TWO (18 million / 300 million). This will be return of capital as far as your TWO is concerned (about $1). Looking at it this way, a sustainable 32 cents for a $10.50 stock isn't bad. (32 cents is my low estimate.)

      I have no clue how the market will react to 32 cents -- mostly becasue I doubt that small investors understand that they will soon own some SBY. (SBY is really an investment for capital appreciation, but it should be cash-flow positive after they double their inventory.)

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