Head-To-Head Contrast: Equity LifeStyle Properties (NYSE:ELS) & Two Harbors Investment (NYSE:TWO)

Equity LifeStyle Properties (NYSE:ELS) and Two Harbors Investment (NYSE:TWO) are both finance companies, but which is the superior stock? We will contrast the two businesses based on the strength of their risk, earnings, valuation, institutional ownership, analyst recommendations, dividends and profitability.

Volatility & Risk

Equity LifeStyle Properties has a beta of 0.69, indicating that its share price is 31% less volatile than the S&P 500. Comparatively, Two Harbors Investment has a beta of 1.87, indicating that its share price is 87% more volatile than the S&P 500.

Valuation and Earnings

This table compares Equity LifeStyle Properties and Two Harbors Investment’s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Equity LifeStyle Properties	$1.49 billion	7.68	$314.21 million	$1.68	36.52
Two Harbors Investment	$480.36 million	2.56	-$106.37 million	($2.00)	-5.94

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

Profitability

This table compares Equity LifeStyle Properties and Two Harbors Investment’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Equity LifeStyle Properties	21.09%	20.90%	5.62%
Two Harbors Investment	-22.14%	2.47%	0.28%

Dividends

Equity LifeStyle Properties pays an annual dividend of $1.91 per share and has a dividend yield of 3.1%. Two Harbors Investment pays an annual dividend of $1.80 per share and has a dividend yield of 15.2%. Equity LifeStyle Properties pays out 113.7% 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 -90.0% of its earnings in the form of a dividend. Two Harbors Investment is clearly the better dividend stock, given its higher yield and lower payout ratio.

Analyst Recommendations

This is a summary of current ratings and recommmendations for Equity LifeStyle Properties and Two Harbors Investment, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Equity LifeStyle Properties	0	6	1	0	2.14
Two Harbors Investment	0	7	1	0	2.13

Equity LifeStyle Properties currently has a consensus target price of $70.15, indicating a potential upside of 14.33%. Two Harbors Investment has a consensus target price of $14.50, indicating a potential upside of 22.05%. Given Two Harbors Investment’s higher possible upside, analysts clearly believe Two Harbors Investment is more favorable than Equity LifeStyle Properties.

Institutional and Insider Ownership

97.2% of Equity LifeStyle Properties shares are held by institutional investors. Comparatively, 64.2% of Two Harbors Investment shares are held by institutional investors. 1.4% of Equity LifeStyle 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 large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Summary

Equity LifeStyle Properties beats Two Harbors Investment on 11 of the 15 factors compared between the two stocks.

About Equity LifeStyle Properties

We are a self-administered, self-managed real estate investment trust (REIT) with headquarters in Chicago. As of January 29, 2024, we own or have an interest in 451 properties in 35 states and British Columbia consisting of 172,465 sites.

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.