Head to Head Comparison: Two Harbors Investments (NYSE:TWO) & Sunrise Realty Trust (NASDAQ:SUNS)

Two Harbors Investments (NYSE:TWO) and Sunrise Realty Trust (NASDAQ:SUNS) are both small-cap finance companies, but which is the better investment? We will compare the two businesses based on the strength of their dividends, risk, earnings, profitability, institutional ownership, valuation and analyst recommendations.

Insider & Institutional Ownership

64.2% of Two Harbors Investments shares are held by institutional investors. 0.7% of Two Harbors Investments shares are held by company insiders. Comparatively, 28.5% of Sunrise Realty Trust shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Profitability

This table compares Two Harbors Investments and Sunrise Realty Trust’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Two Harbors Investments	-6.09%	12.79%	1.44%
Sunrise Realty Trust	53.33%	8.25%	4.90%

Dividends

Two Harbors Investments pays an annual dividend of $0.48 per share and has a dividend yield of 4.0%. Sunrise Realty Trust pays an annual dividend of $1.20 per share and has a dividend yield of 15.5%. Two Harbors Investments pays out -64.9% of its earnings in the form of a dividend. Sunrise Realty Trust pays out 123.7% 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 Investments has increased its dividend for 1 consecutive years.

Analyst Recommendations

This is a summary of current recommendations and price targets for Two Harbors Investments and Sunrise Realty Trust, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Two Harbors Investments	1	5	0	1	2.14
Sunrise Realty Trust	1	2	0	0	1.67

Two Harbors Investments currently has a consensus price target of $12.75, indicating a potential upside of 6.03%. Sunrise Realty Trust has a consensus price target of $8.00, indicating a potential upside of 3.23%. Given Two Harbors Investments’ stronger consensus rating and higher probable upside, equities analysts plainly believe Two Harbors Investments is more favorable than Sunrise Realty Trust.

Risk & Volatility

Two Harbors Investments has a beta of 1.04, suggesting that its stock price is 4% more volatile than the S&P 500. Comparatively, Sunrise Realty Trust has a beta of 1.02, suggesting that its stock price is 2% more volatile than the S&P 500.

Valuation & Earnings

This table compares Two Harbors Investments and Sunrise Realty Trust”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Two Harbors Investments	$366.65 million	3.45	-$454.30 million	($0.74)	-16.25
Sunrise Realty Trust	$21.57 million	4.86	$12.14 million	$0.97	7.99

Sunrise Realty Trust has lower revenue, but higher earnings than Two Harbors Investments. Two Harbors Investments is trading at a lower price-to-earnings ratio than Sunrise Realty Trust, indicating that it is currently the more affordable of the two stocks.

Summary

Two Harbors Investments beats Sunrise Realty Trust on 9 of the 17 factors compared between the two stocks.

About Two Harbors Investments

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 Sunrise Realty Trust

Sunrise Realty Trust, Inc. engages in commercial real estate (CRE) lending business. It focuses on originating CRE debt investments and providing capital to borrowers and sponsors with transitional business plans collateralized by CRE assets. The company intends to create a diversified investment portfolio, targeting investments in senior mortgage loans, mezzanine loans, whole loans, B-notes, CMBS, and debt-like preferred equity securities across CRE asset classes. Sunrise Realty Trust, Inc. was incorporated in 2023 and is based in West Palm Beach, Florida.