NasdaqGS:NTRS

Stock Analysis Report

Executive Summary

Northern Trust Corporation, a financial holding company, provides wealth management, asset servicing, asset management, and banking solutions for corporations, institutions, families, and individuals worldwide.

Snowflake

Fundamentals

Excellent balance sheet established dividend payer.


Similar Companies

Share Price & News

How has Northern Trust's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: NTRS has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

-1.0%

NTRS

1.0%

US Capital Markets

0.7%

US Market


1 Year Return

9.2%

NTRS

8.5%

US Capital Markets

12.9%

US Market

Return vs Industry: NTRS matched the US Capital Markets industry which returned 8.5% over the past year.

Return vs Market: NTRS underperformed the US Market which returned 12.9% over the past year.


Shareholder returns

NTRSIndustryMarket
7 Day-1.0%1.0%0.7%
30 Day13.6%5.8%4.4%
90 Day22.5%7.8%7.0%
1 Year12.2%9.2%11.0%8.5%15.4%12.9%
3 Year39.2%30.7%42.8%34.7%49.1%39.5%
5 Year73.9%56.9%76.5%60.1%62.7%44.7%

Price Volatility Vs. Market

How volatile is Northern Trust's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Northern Trust undervalued compared to its fair value and its price relative to the market?

15.77x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: NTRS ($106.55) is trading above our estimate of fair value ($90.43)

Significantly Below Fair Value: NTRS is trading above our estimate of fair value.


Price To Earnings Ratio

PE vs Industry: NTRS is good value based on its PE Ratio (15.8x) compared to the Capital Markets industry average (35.1x).

PE vs Market: NTRS is good value based on its PE Ratio (15.8x) compared to the US market (18.2x).


Price to Earnings Growth Ratio

PEG Ratio: NTRS's earnings are forecast to decline next year, so we can't calculate its PEG ratio.


Price to Book Ratio

PB vs Industry: NTRS is good value based on its PB Ratio (2.3x) compared to the US Capital Markets industry average (6.4x).


Next Steps

Future Growth

How is Northern Trust forecast to perform in the next 1 to 3 years based on estimates from 16 analysts?

-0.7%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: NTRS's earnings are forecast to decline over the next 3 years (-0.7% per year).

Earnings vs Market: NTRS's earnings are forecast to decline over the next 3 years (-0.7% per year).

High Growth Earnings: NTRS's earnings are forecast to decline over the next 3 years.

Revenue vs Market: NTRS's revenue (1.8% per year) is forecast to grow slower than the US market (7.3% per year).

High Growth Revenue: NTRS's revenue (1.8% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: NTRS's Return on Equity is forecast to be low in 3 years time (15.1%).


Next Steps

Past Performance

How has Northern Trust performed over the past 5 years?

13.9%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: NTRS has high quality earnings.

Growing Profit Margin: NTRS's current net profit margins (24.3%) are lower than last year (24.4%).


Past Earnings Growth Analysis

Earnings Trend: NTRS's earnings have grown by 13.9% per year over the past 5 years.

Accelerating Growth: NTRS's earnings growth over the past year (2%) is below its 5-year average (13.9% per year).

Earnings vs Industry: NTRS earnings growth over the past year (2%) underperformed the Capital Markets industry 20.6%.


Return on Equity

High ROE: NTRS's Return on Equity (14.2%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Northern Trust's financial position? (This company is analysed differently as a bank or financial institution)


Financial Position Analysis


Debt to Equity History and Analysis


Balance Sheet

Inventory Level: NTRS has a low level of unsold assets or inventory.

Debt Coverage by Assets: NTRS's debt is covered by short term assets (assets are 2.8x debt).


Financial Institutions Analysis

Asset Level: NTRS's level of assets compared to its equity is moderate.

Allowance for Bad Loans: NTRS has a low allowance for bad loans.

Low Risk Liabilities: NTRS's liabilities are made up of primarily low risk sources of funding.

Loan Level: NTRS has an acceptable proportion of non-loan assets held.

Low Risk Deposits: NTRS's loans are broadly funded by customer deposits.

Level of Bad Loans: NTRS has an appropriate level of bad loans (0.37%)


Next Steps

Dividend

What is Northern Trust's current dividend yield, its reliability and sustainability?

2.63%

Current Dividend Yield


Upcoming Dividend Payment

Purchase Northern Trust before the 'Buy Limit' to receive their next dividend payment.


Dividend Yield vs Market

company2.6%marketbottom25%1.4%markettop25%3.6%industryaverage2.0%forecastin3Years2.6%

Current dividend yield vs market & industry

Notable Dividend: NTRS's dividend (2.63%) is higher than the bottom 25% of dividend payers in the US market (1.42%).

High Dividend: NTRS's dividend (2.63%) is low compared to the top 25% of dividend payers in the US market (3.65%).


Stability and Growth of Payments

Stable Dividend: NTRS's dividends per share have been stable in the past 10 years.

Growing Dividend: NTRS's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonably low payout ratio (36.3%), NTRS's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: NTRS's dividends in 3 years are forecast to be well covered by earnings (41.7% payout ratio).


Next Steps

Management

What is the CEO of Northern Trust's salary, the management and board of directors tenure and is there insider trading?

5.3yrs

Average management tenure


CEO

Mike O’Grady (53yo)

1.8yrs

Tenure

US$7,971,986

Compensation

Mr. Michael G. O'Grady, also known as Mike, has been the Chairman of Northern Trust Corporation and Northern Trust Company since January 23, 2019. Mr. O'Grady has been the President and Chief Executive off ...


CEO Compensation Analysis

Compensation vs Market: Mike's total compensation ($USD7.97M) is about average for companies of similar size in the US market ($USD11.01M).

Compensation vs Earnings: Mike's compensation has increased by more than 20% in the past year.


Management Age and Tenure

5.3yrs

Average Tenure

54yo

Average Age

Experienced Management: NTRS's management team is seasoned and experienced (5.3 years average tenure).


Board Age and Tenure

7.3yrs

Average Tenure

63.5yo

Average Age

Experienced Board: NTRS's board of directors are considered experienced (7.3 years average tenure).


Insider Trading

Insider Buying: NTRS insiders have only sold shares in the past 3 months.


Recent Insider Transactions

SellUS$815,21731 Oct 19
Joyce Clair
EntityIndividual
Shares8,110
Max PriceUS$100.52
SellUS$37602 Oct 19
Dean Harrison
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares4
Max PriceUS$93.99
SellUS$98,54016 Sep 19
Thomas South
EntityIndividual
Role
Chief Information Officer
Executive VP & Chief Information Officer
Shares1,000
Max PriceUS$98.54
SellUS$1,195,20030 Jul 19
Robert Browne
EntityIndividual
Role
Chief Investment Officer
Executive VP & Chief Investment Officer
Shares12,000
Max PriceUS$99.60
SellUS$1,056,11314 Jun 19
Robert Browne
EntityIndividual
Role
Chief Investment Officer
Executive VP & Chief Investment Officer
Shares12,156
Max PriceUS$86.88
SellUS$12,28218 Dec 18
Stephen Potter
EntityIndividual
Shares141.33
Max PriceUS$86.90

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Management Team

  • Steve Fradkin (57yo)

    Executive VP & President of Wealth Management

    • Tenure: 16.8yrs
    • Compensation: US$4.10m
  • Ian Headon

    Head of Depositary Regulatory & Technical Services

    • Tenure: 0yrs
  • Pete Cherecwich (54yo)

    Executive VP and President of Corporate & Institutional Services

    • Tenure: 0yrs
    • Compensation: US$4.08m
  • Stephen Bowman (55yo)

    Executive VP & CFO

    • Tenure: 5.2yrs
    • Compensation: US$3.74m
  • Susan Levy (61yo)

    Executive VP

    • Tenure: 5.5yrs
  • Mike O’Grady (53yo)

    Chairman

    • Tenure: 1.8yrs
    • Compensation: US$7.97m
  • Bob Browne (54yo)

    Executive VP & Chief Investment Officer

    • Tenure: 10.8yrs
  • K. Mannard

    Chief Marketing & Communications Officer

    • Tenure: 0yrs
  • Mark Bette

    Senior VP

    • Tenure: 0yrs
  • Thomas South (49yo)

    Executive VP & Chief Information Officer

    • Tenure: 1.8yrs

Board Members

  • Martin Slark (65yo)

    Lead Director

    • Tenure: 0.6yrs
    • Compensation: US$254.96k
  • Susan Crown (60yo)

    Independent Director

    • Tenure: 22.8yrs
    • Compensation: US$229.96k
  • Linda Bynoe (67yo)

    Independent Director

    • Tenure: 13.6yrs
    • Compensation: US$234.96k
  • David H. Smith (52yo)

    Independent Director

    • Tenure: 9.6yrs
    • Compensation: US$254.96k
  • Charles Tribbett (63yo)

    Independent Director

    • Tenure: 14.8yrs
    • Compensation: US$234.96k
  • R. Magill

    Vice Chairman for Wealth Management

    • Tenure: 0.8yrs
  • Dean Harrison (64yo)

    Independent Director

    • Tenure: 4.8yrs
    • Compensation: US$239.96k
  • Mike O’Grady (53yo)

    Chairman

    • Tenure: 1.8yrs
    • Compensation: US$7.97m
  • Jose Prado Becerra (64yo)

    Independent Director

    • Tenure: 7.1yrs
    • Compensation: US$229.96k
  • Hidehiro Nakayama

    President & Representative Director of Northern Trust Global Investments Japan

    • Tenure: 7.4yrs

Company Information

Northern Trust Corporation's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Northern Trust Corporation
  • Ticker: NTRS
  • Exchange: NasdaqGS
  • Founded: 1889
  • Industry: Asset Management and Custody Banks
  • Sector: Diversified Financials
  • Market Cap: US$22.576b
  • Shares outstanding: 211.88m
  • Website: https://www.northerntrust.com

Number of Employees


Location

  • Northern Trust Corporation
  • 50 South La Salle Street
  • Chicago
  • Illinois
  • 60603
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
NTRSNasdaqGS (Nasdaq Global Select)YesCommon StockUSUSDJan 1969
NT4DB (Deutsche Boerse AG)YesCommon StockDEEURJan 1969
0K91LSE (London Stock Exchange)YesCommon StockGBUSDJan 1969
NTRS.PNasdaqGS (Nasdaq Global Select)DEP SHS RP PFD CUSUSDAug 2014

Biography

Northern Trust Corporation, a financial holding company, provides wealth management, asset servicing, asset management, and banking solutions for corporations, institutions, families, and individuals world ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/11/16 23:43
End of Day Share Price2019/11/15 00:00
Earnings2019/09/30
Annual Earnings2018/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.