Settlement Agreement Ends Legal Dispute, Two Harbors Secures Intellectual Property

Two Harbors Investment Corp. (NYSE:TWO) is one of the 14 Best Cheap Dividend Stocks to Buy Under $10.

Following mixed second-quarter results, the company entered a settlement agreement resolving all claims.

Founded in 2009, Two Harbors Investment Corp. (NYSE:TWO) is a REIT that invests in residential mortgage-backed securities (RMBS). Its objective is to provide risk-adjusted return to shareholders through dividends and capital appreciation. The company operates from its headquarters located in Minnesota with a portfolio primarily consisting of Agency RMBS, which are issued or guaranteed by a U.S. government agency or government-sponsored enterprise.

The Q2 earnings call released on July 29, 2025, highlighted an improvement in the performance of Agency RMBS spreads with an improvement in the macro environment. While the total economic return was negative at 14.5% including loss contingency accrual, the company noted an increase in its first lien originations by 68% quarter-over-quarter, outpacing the national trend.

Amid these negative returns, on August 20, 2025, the company announced entering into a settlement agreement resolving all claims in its litigation with PRCM Advisers LLC, Pine River Capital Management L.P., and Pine River Domestic Management L.P. by making a one-time cash payment of $375M to Pine River.

Analysts’ ratings are split between Buy and Hold, with a 1-year median price target of 20%. Alongside this potential growth in value, the stock offers a dividend yield of 16.50% at a share price of $9.88 as of August 28, 2025.

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