Two Harbors Investment

TWO

Market cap $1B

Two Harbors Investment baby bond offers an attractive yield of 8.88% with lower risk than common and preferred shares. TWO's strong capital buffer, high cash flow coverage, and 64% Agency MBS portfolio provide robust protection for TWOD investors. TWOD stands out in the mortgage REIT sector with one of the best equity-to-debt ratios and a stable dividend history.

NEW YORK--(BUSINESS WIRE)---- $TWO #Earnings--TWO Announces Earnings Release and Conference Call for Third Quarter 2025 Financial Results.

I think it goes without saying that everyone loves to make money—especially passive income—and it's for this reason that dividend stocks are having a moment right now.

Agency mREITs capitalized on wide mortgage spreads by issuing equity and buying agency-backed mortgages, leading to significant mark-to-market gains as spreads tightened. Dynex and AGNC Investment expanded portfolios via equity issuance, benefiting preferred shareholders through increased equity cushion, though common shares face dilution. AGNCZ, AGNC's new Series H preferred, offers an 8.75% yield and is attractive for income investors; Armour and Two Harbors preferreds also present upside potential.

Two Harbors Investment is an mREIT focused on residential mortgage backed securities and mortgage servicing rights. Q3 2025 reported earnings will reflect the residual impact of a $375 million settlement with the company's former advisors from Pine River. This shifts investors' focus on Q4 2025 earnings, which should show the early benefits of lower repurchase agreement financing costs.

We take a look at the action in preferreds and baby bonds through the fourth week of August and highlight some of the key themes we are watching. Preferreds credit spreads are near 5-year lows with yields on a downward trajectory as well. American Equity Life's ANG.PR.B preferred is likely to be redeemed soon, offering limited downside and extra accrued interest for holders.

As noted by CEO Brian Sedrish, “As market activity rebounds, we're seeing more transaction volume and increased demand for financing among borrowers seeking capital for both acquisitions and refinancings.

U.S. equity markets notched another series of record highs this week, surging into the weekend after surprisingly dovish commentary from Federal Reserve Chair Powell, who hinted at imminent rate cuts. Powell used his final Jackson Hole speech as Fed Chair to deliver a clear policy pivot, an unexpected reversal after months of insistence that tariff-related inflation warranted a hawkish framework. Markets were equally relieved by the policy-focused nature of Powell's speech amid speculation that the address may be used instead as a potential defiant sermon on central bank independence.

NEW YORK--(BUSINESS WIRE)--TWO Provides Business Update: Announces Resolution of Litigation and Third Quarter 2025 Common and Preferred Stock Dividends.