NYSE:STT

Stock Analysis Report

Executive Summary

State Street Corporation, through its subsidiaries, provides a range of financial products and services to institutional investors worldwide.

Rewards

Trading at 6.2% below its fair value

Earnings are forecast to grow 2.88% per year

Pays a high and reliable dividend of 2.63%

Risk Analysis

Highly volatile share price over past 3 months



Snowflake Analysis

Established dividend payer and good value.


Similar Companies

Share Price & News

How has State Street's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: STT's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

2.7%

STT

0.1%

US Capital Markets

0.6%

US Market


1 Year Return

24.6%

STT

22.4%

US Capital Markets

20.8%

US Market

Return vs Industry: STT exceeded the US Capital Markets industry which returned 22.4% over the past year.

Return vs Market: STT exceeded the US Market which returned 20.8% over the past year.


Shareholder returns

STTIndustryMarket
7 Day2.7%0.1%0.6%
30 Day9.5%4.6%2.5%
90 Day29.4%6.1%4.9%
1 Year28.6%24.6%24.9%22.4%23.5%20.8%
3 Year7.8%0.6%41.7%33.6%46.5%37.0%
5 Year10.7%-0.8%76.7%60.2%64.6%46.5%

Price Volatility Vs. Market

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


Simply Wall St News

Valuation

Is State Street undervalued compared to its fair value and its price relative to the market?

6.2%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: STT ($79.13) is trading below our estimate of fair value ($84.32)

Significantly Below Fair Value: STT is trading below fair value, but not by a significant amount.


Price To Earnings Ratio

PE vs Industry: STT is good value based on its PE Ratio (15.4x) compared to the Capital Markets industry average (33.4x).

PE vs Market: STT is good value based on its PE Ratio (15.4x) compared to the US market (18.6x).


Price to Earnings Growth Ratio

PEG Ratio: STT is poor value based on its PEG Ratio (5.4x)


Price to Book Ratio

PB vs Industry: STT is good value based on its PB Ratio (1.3x) compared to the US Capital Markets industry average (6.3x).


Next Steps

Future Growth

How is State Street forecast to perform in the next 1 to 3 years based on estimates from 15 analysts?

2.9%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: STT's forecast earnings growth (2.9% per year) is above the savings rate (1.7%).

Earnings vs Market: STT's earnings (2.9% per year) are forecast to grow slower than the US market (14.4% per year).

High Growth Earnings: STT's earnings are forecast to grow, but not significantly.

Revenue vs Market: STT's revenue (0.8% per year) is forecast to grow slower than the US market (7.4% per year).

High Growth Revenue: STT's revenue (0.8% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: STT's Return on Equity is forecast to be low in 3 years time (10.4%).


Next Steps

Past Performance

How has State Street performed over the past 5 years?

3.7%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: STT has high quality earnings.

Growing Profit Margin: STT's current net profit margins (16.6%) are lower than last year (19.6%).


Past Earnings Growth Analysis

Earnings Trend: STT's earnings have grown by 3.7% per year over the past 5 years.

Accelerating Growth: STT's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: STT had negative earnings growth (-18.1%) over the past year, making it difficult to compare to the Capital Markets industry average (20.6%).


Return on Equity

High ROE: STT's Return on Equity (8.4%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is State Street'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: STT has a low level of unsold assets or inventory.

Debt Coverage by Assets: STT's debt is covered by short term assets (assets are 2.1x debt).


Financial Institutions Analysis

Asset Level: STT's level of assets compared to its equity is low.

Allowance for Bad Loans: Insufficient data to determine if STT has a sufficient allowance for bad loans.

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

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

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

Level of Bad Loans: Insufficient data to determine if STT has an appropriate level of bad loans.


Next Steps

Dividend

What is State Street's current dividend yield, its reliability and sustainability?

2.63%

Current Dividend Yield


Dividend Yield vs Market

company2.6%marketbottom25%1.4%markettop25%3.7%industryaverage1.9%forecastin3Years2.7%

Current dividend yield vs market & industry

Notable Dividend: STT's dividend (2.63%) is higher than the bottom 25% of dividend payers in the US market (1.43%).

High Dividend: STT's dividend (2.63%) is low compared to the top 25% of dividend payers in the US market (3.71%).


Stability and Growth of Payments

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

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


Current Payout to Shareholders

Dividend Coverage: With its reasonably low payout ratio (37.7%), STT's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: STT's dividends in 3 years are forecast to be well covered by earnings (33.6% payout ratio).


Next Steps

Management

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

0.8yrs

Average management tenure


CEO

Ron O’Hanley (62yo)

0.9yrs

Tenure

US$8,336,665

Compensation

Mr. Ronald Philip O'Hanley, also known as Ron, has been the Chief Executive Officer of State Street Corporation since January 1, 2019 and has been its President since November 6, 2017. He served as Chief O ...


CEO Compensation Analysis

Compensation vs Market: Ron's total compensation ($USD8.34M) is about average for companies of similar size in the US market ($USD10.94M).

Compensation vs Earnings: Ron's compensation has been consistent with company performance over the past year.


Management Age and Tenure

0.8yrs

Average Tenure

55yo

Average Age

Experienced Management: STT's management team is not considered experienced ( 0.8 years average tenure), which suggests a new team.


Board Age and Tenure

7.0yrs

Average Tenure

63yo

Average Age

Experienced Board: STT's board of directors are considered experienced (7 years average tenure).


Insider Trading

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


Recent Insider Transactions

SellUS$187,70003 Dec 19
Jörg Ambrosius
EntityIndividual
Shares2,500
Max PriceUS$75.08
SellUS$1,642,50004 Nov 19
Joseph Hooley
EntityIndividual
Role
Chairman of the Board
Chairman of the Board
Shares25,000
Max PriceUS$65.70
BuyUS$24,62019 Aug 19
Patrick de Saint-Aignan
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares500
Max PriceUS$49.24
BuyUS$54,31505 Aug 19
Patrick de Saint-Aignan
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares1,000
Max PriceUS$54.88
BuyUS$86,62501 Aug 19
Patrick de Saint-Aignan
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares1,500
Max PriceUS$58.75
BuyUS$29,42524 Jul 19
Patrick de Saint-Aignan
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares500
Max PriceUS$58.85
BuyUS$193,50009 May 19
Gregory Summe
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares3,000
Max PriceUS$64.50
SellUS$1,975,05004 Mar 19
Ronald O’Hanley
EntityIndividual
Role
Chief Executive Officer
President
Shares27,500
Max PriceUS$71.82

Ownership Breakdown

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


Management Team

  • Karen Keenan (56yo)

    Executive VP & Chief Administrative Officer (Leave of Absence)

    • Tenure: 0.6yrs
    • Compensation: US$6.15m
  • Ron O’Hanley (62yo)

    President

    • Tenure: 0.9yrs
    • Compensation: US$8.34m
  • Jeff Carp (62yo)

    Executive VP

    • Tenure: 13.9yrs
    • Compensation: US$5.90m
  • Tracy Atkinson (55yo)

    Executive VP & Acting Chief Administrative Officer

    • Tenure: 0.6yrs
  • Eric Aboaf (55yo)

    Executive VP & CFO

    • Tenure: 2.8yrs
    • Compensation: US$7.44m
  • Lou Maiuri (54yo)

    Executive VP & COO

    • Tenure: 0.8yrs
  • Jacki Angell (45yo)

    Executive VP & Acting Chief Compliance Officer

    • Tenure: 0.6yrs
  • Ali El Abboud

    EVP & Chief Technology Officer

    • Tenure: 0.3yrs
  • Ilene Bieler

    Global Head of Investor Relations

    • Tenure: 0yrs
  • Ian Appleyard (54yo)

    Executive VP

    • Tenure: 1.6yrs

Board Members

  • Kennett Burnes (76yo)

    Independent Director

    • Tenure: 16.9yrs
    • Compensation: US$453.72k
  • Greg Summe (62yo)

    Independent Director

    • Tenure: 18.9yrs
    • Compensation: US$361.97k
  • Rick Sergel (69yo)

    Independent Director

    • Tenure: 20.9yrs
    • Compensation: US$364.76k
  • Ron O’Hanley (62yo)

    President

    • Tenure: 0.9yrs
    • Compensation: US$8.34m
  • Jay Hooley (61yo)

    Chairman of the Board

    • Tenure: 8.9yrs
    • Compensation: US$16.10m
  • Sean O'Sullivan (63yo)

    Independent Director

    • Tenure: 2.6yrs
    • Compensation: US$321.52k
  • Patrick de Saint-Aignan (70yo)

    Independent Director

    • Tenure: 10.8yrs
    • Compensation: US$399.72k
  • Dame Fawcett (63yo)

    Independent Lead Director

    • Tenure: 0.6yrs
    • Compensation: US$329.02k
  • Bill Freda (66yo)

    Independent Director

    • Tenure: 5yrs
    • Compensation: US$393.72k
  • Lynn Dugle (59yo)

    Independent Director

    • Tenure: 4yrs
    • Compensation: US$383.34k

Company Information

State Street Corporation's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: State Street Corporation
  • Ticker: STT
  • Exchange: NYSE
  • Founded: 1792
  • Industry: Asset Management and Custody Banks
  • Sector: Diversified Financials
  • Market Cap: US$28.774b
  • Shares outstanding: 363.62m
  • Website: https://www.statestreet.com

Number of Employees


Location

  • State Street Corporation
  • State Street Financial Center
  • One Lincoln Street
  • Boston
  • Massachusetts
  • 2111
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
STTNYSE (New York Stock Exchange)YesCommon StockUSUSDJan 1980
ZYADB (Deutsche Boerse AG)YesCommon StockDEEURJan 1980
STT *BMV (Bolsa Mexicana de Valores)YesCommon StockMXMXNJan 1980
0L9GLSE (London Stock Exchange)YesCommon StockGBUSDJan 1980
STT.PRCNYSE (New York Stock Exchange)DEP SHS REPSTG 1USUSDAug 2012
STT.PRDNYSE (New York Stock Exchange)DEP SHS 1/4000 DUSUSDFeb 2014
STT.PRGNYSE (New York Stock Exchange)DEP SHS PFD GUSUSDApr 2016
A2RSCJDB (Deutsche Boerse AG)5.625%-FRN PERP USD 'H'DEUSDSep 2018

Biography

State Street Corporation, through its subsidiaries, provides a range of financial products and services to institutional investors worldwide. It offers investment servicing products and services, including ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/12/14 23:40
End of Day Share Price2019/12/13 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.