9% Yield Buys From Two Harbors Preferred Shares

We are bullish on all 5 preferred shares from TWO. We find the preferred shares from Two Harbors quite attractive. We've purchased positions in a few of them recently. They certainly carry some risk, but less than investors might expect for shares trading at such a large discount to call value. Currently, all five series of preferred shares are attractive. However, on a purely fundamental basis, we view TWO-B, TWO-D, and TWO-E as the best options.

We will be covering the preferred shares from Two Harbors (TWO) in this article. Since the question is likely to come up in the comments, we're also bullish on the common shares. Investors should be aware that the common shares of TWO carry materially more risk than TWO's preferred shares. A key difference here comes to income investors. With the preferred shares, investors have much better stability of income and portfolio value. That doesn't mean the common dividend is unsustainable today.

Source: Seeking Alpha

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