Two Harbors Investment (NYSE:TWO – Get Free Report) and Extra Space Storage (NYSE:EXR – Get Free Report) are both finance companies, but which is the better investment? We will compare the two companies based on the strength of their institutional ownership, valuation, dividends, analyst recommendations, risk, profitability and earnings.
Insider and Institutional Ownership
64.2% of Two Harbors Investment shares are held by institutional investors. Comparatively, 99.1% of Extra Space Storage shares are held by institutional investors. 0.6% of Two Harbors Investment shares are held by insiders. Comparatively, 1.4% of Extra Space Storage shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.
Earnings and Valuation
This table compares Two Harbors Investment and Extra Space Storage’s gross revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Two Harbors Investment | $322.40 million | 4.45 | -$106.37 million | $1.78 | 7.79 |
| Extra Space Storage | $3.16 billion | 11.96 | $803.20 million | $4.49 | 39.69 |
Risk & Volatility
Two Harbors Investment has a beta of 1.86, meaning that its share price is 86% more volatile than the S&P 500. Comparatively, Extra Space Storage has a beta of 0.83, meaning that its share price is 17% less volatile than the S&P 500.
Analyst Recommendations
This is a summary of recent ratings and target prices for Two Harbors Investment and Extra Space Storage, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Two Harbors Investment | 0 | 3 | 3 | 0 | 2.50 |
| Extra Space Storage | 2 | 5 | 5 | 0 | 2.25 |
Two Harbors Investment presently has a consensus target price of $14.90, suggesting a potential upside of 7.50%. Extra Space Storage has a consensus target price of $165.25, suggesting a potential downside of 7.28%. Given Two Harbors Investment’s stronger consensus rating and higher probable upside, equities research analysts clearly believe Two Harbors Investment is more favorable than Extra Space Storage.
Dividends
Two Harbors Investment pays an annual dividend of $1.80 per share and has a dividend yield of 13.0%. Extra Space Storage pays an annual dividend of $6.48 per share and has a dividend yield of 3.6%. Two Harbors Investment pays out 101.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Extra Space Storage pays out 144.3% 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 is clearly the better dividend stock, given its higher yield and lower payout ratio.
Profitability
This table compares Two Harbors Investment and Extra Space Storage’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Two Harbors Investment | 27.71% | 3.64% | 0.43% |
| Extra Space Storage | 25.82% | 5.43% | 3.02% |
Summary
Extra Space Storage beats Two Harbors Investment on 10 of the 16 factors compared between the two stocks.
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.
About Extra Space Storage
Extra Space Storage Inc., headquartered in Salt Lake City, Utah, is a self-administered and self-managed REIT and a member of the S&P 500. As of December 31, 2023, the Company owned and/or operated 3,714 self-storage stores in 42 states and Washington, D.C. The Company's stores comprise approximately 2.6 million units and approximately 283.0 million square feet of rentable space operating under the Extra Space, Life Storage and Storage Express brands. The Company offers customers a wide selection of conveniently located and secure storage units across the country, including boat storage, RV storage and business storage. It is the largest operator of self-storage properties in the United States.
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