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10% Dividend Payer Two Harbors Had A 15% Total Return For FY2014; Outlook Is Mixed

Two Harbors Investment Corp. (TWO) is a mortgage REIT. Its objective is to provide long-term, attractive, risk-adjusted returns to stockholders primarily through dividends and secondarily through capital appreciation. It invests in Agency RMBS, non-Agency RMBS, prime nonconforming residential mortgage loans, credit sensitive mortgage loans, mortgage servicing rights, and other financial assets amounting to 5%-10% of its portfolio. It is externally managed and advised by PRCM Advisers LLC, a wholly owned subsidiary of Pine River Capital Management L.P., which is a global, multi-strategy asset management firm with expertise in fixed income securities such as RMBS. Notably, Pine River recently hired an experienced commercial real estate team. This provides TWO with the opportunity to diversify into that lately very profitable area, and TWO intends to do so with an initial allocation of $500 million in equity capital.

The pie chart below shows a breakout of TWO's portfolio as of December 31,… Read More …