Two Harbors Investment is a mortgage REIT that invests in agency residential mortgage-backed securities. The principal and interest payments from the underlying mortgages of such securities are guaranteed by government-sponsored enterprise Fannie Mae, Freddie Mac, or Ginnie Mae (though Ginnie Mae is not a GSE).
Two Harbors Investment currently trades at a 9% discount from its accounting book value, which is lower than the 12% discount for American Capital Agency Corporation (NASDAQ:AGNC), and the 14% discount from Annaly Capital Management (NYSE:NLY).
It was a difficult 2013 for mortgage REITs, as the sector experienced a great deal of trouble because of the Federal Reserve's uncertain monetary policy.
Leverage is a big thing for mortgage REITs and naturally an area of interest for investors.
Kingkarn Amjaroen and The Motley Fool have no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.