NTRS  Northern Trust Corporation

Exchange

NASDAQ

Sector

Finance

Industry

Major Banks

Market Cap.

21.91B

Vuru Grade

37.08/100

Current Price

$95.42
+1.22 (+1.30%)

Growth Price

$71.60
Overvalued by 24.96%

Stability Price

$85.88
Overvalued by 10.00%

Company Metrics

  • P/E 21.76
  • P/S 4.25
  • P/B 2.38
  • EPS 4.39
  • Cash ROIC 0.37%
  • Cash Ratio -
  • Dividend 1.52 / 1.62 %
  • Avg. Vol. 1.06M
  • Shares 229.62M
  • Market Cap. 21.91B

Company Description

Northern Trust Corporation, through its subsidiaries, provides investment management, asset and fund administration, banking solutions, and fiduciary services for corporations, institutions, and affluent individuals worldwide. It offers various deposit products, including demand and other noninterest bearing, savings, money market, savings certificates, and time deposit accounts. The company's loa... more


Download 10 Years of Financial Statements:
Income Statement   Balance Sheet   Cash Flow

News

Northern Trust Survey: Surge in Demand Shows Transparency is Key to Success ...
Business Wire (press release) - Jun 20, 2017
“These results tell us that investment transparency is a growing priority, but asset managers and institutional investors remain unsure of how to best achieve it,” said Pete Cherecwich, President of Corporate and Institutional Services at Northern Trust.
Commit To Buy Northern Trust Corp. At $77.50, Earn 4.7% Annualized Using Options
Nasdaq - May 31, 2017
Investors eyeing a purchase of Northern Trust Corp. (Symbol: NTRS) shares, but tentative about paying the going market price of $86.86/share, might benefit from considering selling puts among the alternative strategies at their disposal.
NORTHERN TRUST CORPORATION (NASDAQ:NTRS) Files An 8-K Regulation FD Disclosure - The Momentous News
Key Professional Analysts at KBW Didn't Change their 'Hold' rating for ... - Weekly Register
Northern Trust Corporation (NTRS) Hits 52-Week High
Highlight Press - 16 hours ago
Short traders are more bullish on shares of Northern Trust Corporation recently if you watch the change in short interest. The firm realized a fall in short interest from May 15, 2017 to April 28, 2017 of -10.34%.
Northern Trust Corporation (NTRS) on Focus After Trading At All-Time Highs - Weekly Register
State Street Corp Decreases Position in Northern Trust Corporation (NTRS) - BNB Daily (blog)
Ex-Dividend Reminder: Northern Trust, Old Republic International and Principal ...
Nasdaq - May 30, 2017
Looking at the universe of stocks we cover at Dividend Channel , on 5/31/17, Northern Trust Corp. (Symbol: NTRS), Old Republic International Corp.
Can Northern Trust Corporation (NASDAQ:NTRS) truly back claims of $0.38 ... - WeeklyHub
Risk Malaise Alert in Option Market: Northern Trust Corporation Implied Price ...
CML News - Jun 26, 2017
Before we dive into any analysis we simply note that Northern Trust Corporation (NASDAQ:NTRS) risk is actually priced pretty low by the option market as of right now.
Northern Trust Survey: Half of Asian Institutional Investors and Investment ...
Business Wire (press release) - Jun 15, 2017
Northern Trust Corporation (Nasdaq: NTRS) is a leading provider of wealth management, asset servicing, asset management and banking to corporations, institutions, affluent families and individuals.
Atlantic Trust, LLC Buys Northern Trust Corp, Starbucks Corp, Amazon.com Inc ...
GuruFocus.com - Jun 19, 2017
Investment company Atlantic Trust, LLC buys Northern Trust Corp, Starbucks Corp, Amazon.com Inc, Alphabet Inc, Calcol Inc, Altria Group Inc, 8point3 Energy Partners LP, Comcast Corp, Apple Inc, Walt Disney Co, sells Verizon Communications Inc, CVS ...
Northern Trust Corporation Risk Points versus Financials
CML News - Jun 20, 2017
This is a scatter plot analysis of the critical risk points from the option market for Northern Trust Corporation (NASDAQ:NTRS) compared to its own past and the Financials ETF.
Northern Trust Survey: Transparency Increasingly Key To Alternative Asset Demand
FINalternatives - Jun 21, 2017
“These results tell us that investment transparency is a growing priority, but asset managers and institutional investors remain unsure of how to best achieve it,” said Pete Cherecwich, president of corporate and institutional services at Northern Trust.
Northern Trust Raises Prime Rate
Business Wire (press release) - Jun 13, 2017
Northern Trust Corporation (Nasdaq: NTRS) is a leading provider of wealth management, asset servicing, asset management and banking to corporations, institutions, affluent families and individuals.
Northern Trust Corporation (NTRS): What does the future look like? - Simply Wall St
BARING ASSET MANAGEMENT Ltd Invests $1.64 Million in Northern Trust ... - The Cerbat Gem
Growth Rate Assumed by Market

We did a reverse valuation to calculate the growth rate the market is assuming for NTRS to be considered fairly valued at its current market price. It's useful to compare this to the growth rate we're assuming for the Growth Price.

Future Free Cash Flow Growth Rate

This is the annual growth rate we've applied to calculate NTRS's Free Cash Flow for the next 10 years. To calculate it, we looked at several time periods of the last 10 years. Feel free to adjust it, but we limit the initial growth rate to 20% and slow it down over the years. Otherwise, long-term sustainability issues come into play.

Discount Rate

The discount rate is the annual rate of return an investor requires to take the risk of investing in a single stock. To account for that risk, this should be above 8-10%, as this is the avg. annual rate of return for the S&P500 over the past 100 years.

$95.42 Current Price

$71.60 Growth Price (DCF)

Overvalued by 24.96%


Growth Rate Assumed by Market: 14.85%


Future Free Cash Flow Growth Rate: 0.0%


Discount Rate: 15.0%


Show Free Cash Flow numbers

$85.88 Stability Price (EPV)

Overvalued by 10.00%


Discount Rate: 15.0%

$74.69 Book Price

Overvalued by 21.72%


Poor Cash Return on Invested Capital over the past 5 years

NTRS has been unable to consistently generate sufficient returns from its investments in buildings, projects and equipment. This could be due to poor management, lack of an economic moat or the capital intensive nature of the business.

NTRS has only created $0.37 of cash for every $100 invested.
Figures in USD. Fiscal year ends in December
20122013201420152016
Free Cash Flow 277.60M - -535.40M 1.40B 1.04B
divided by
Invested Capital 97.46B 102.66B 109.95B 116.75B 123.93B
Cash ROIC 0.28% - -0.49% 1.20% 0.84%

Satisfactory Return on Equity over the past 5 years

NTRS has generated adequate returns with capital that shareholders have invested. This is sufficient and implies that management performance has been good.

NTRS has generated $10.15 of Earnings for every $100 of Shareholders' Equity.
Figures in USD. Fiscal year ends in December
20122013201420152016
Net Income 687.30M 727.50M 811.80M 973.80M 1.03B
divided by
Stockholders' Equity 7.53B 7.10B 8.45B 8.71B 9.77B
Return on Equity 9.13% 10.24% 9.61% 11.19% 10.57%

Good Business Performance over the past 10 years

It's likely NTRS has been unable to maintain profitability in tough economic times, making it a somewhat cyclical business. The other possibility is NTRS has expended significant capital on items such as property, plant and equipment in specific years. Look for correlations.

NTRS has created positive free cash flow for 7 or 8 of the past 10 years.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Free Cash Flow 880.70M 855.30M 882.10M 699.70M 1.25B 277.60M - -535.40M 1.40B 1.04B

Weak Balance Sheet

NTRS's financial position is not ideal. The key is to check whether NTRS is using debt to fuel its growth and the sustainability of that tendency. Highly capital intensive businesses (see Economic Moat) follow this route, which can deeply impact the future prospects of the business.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Cash - - - - - - - - - -
Current Assets - - - - - - - - - -
Total Assets 67.61B 82.05B 82.14B 83.84B 100.22B 97.46B 102.66B 109.95B 116.75B 123.93B
Current Liabilities - - - - - - - - - -
Total Liabilities 63.10B 75.66B 75.83B 77.01B 93.11B 89.94B 95.56B 101.50B 108.04B 114.16B
Stockholder' Equity 4.51B 6.39B 6.31B 6.83B 7.12B 7.53B 7.10B 8.45B 8.71B 9.77B
Current Ratio - - - - - - - - - -
TL-to-TA 0.93 0.92 0.92 0.92 0.93 0.92 0.93 0.92 0.93 0.92

Low or No Reinvestment of Profits over the past 10 years

NTRS has either been retaining a small amount of their earnings or has done so inconsistently. A lack of consistency could be due to NTRS operating at a loss or them having such a strong economic moat they feel comfortable spending profits on growth. Be wary of future prospects and if applicable, inspect the moat's sustainability.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Retained Earnings 4.56B 5.09B 5.58B 5.97B 6.30B 6.70B - 7.63B 8.24B 8.91B
Retained Earnings Growth - 11.74% 9.52% 7.10% 5.53% 6.35% -100.00% - 8.10% 8.07%

Potential Competitive Advantage over the past 10 years

NTRS potentially has a competitive advantage. This could be strong branding, the ability to keep costs low, or some other characteristic that is hard to replicate. Look at its future prospects to determine sustainability and whether the economic moat will strengthen.

$19.29 of every $100 of Revenue have been pure profit, on average over the past 10 years.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Net Income 726.90M 794.80M 864.20M 669.50M 603.60M 687.30M 727.50M 811.80M 973.80M 1.03B
divided by
Revenue 3.51B 4.28B 3.79B 3.65B 3.77B 3.90B 3.92B 4.33B 4.70B 4.96B
Net Profit Margin 20.72% 18.58% 22.82% 18.35% 16.01% 17.64% 18.55% 18.74% 20.71% 20.81%

Weak Pricing Power over the past 10 years

NTRS is likely in a highly competitive industry, due to low barriers to entry. It's because of this, that NTRS has been unable to raise prices and increase their profitability. This puts them in a poor position if inflation becomes an issue, as they would struggle to pass higher costs onto consumers.

Only $- of every $100 worth of sales have been Gross Profit, on average over the past 10 years.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Gross Profit - - - - - - - - - -
divided by
Revenue 3.51B 4.28B 3.79B 3.65B 3.77B 3.90B 3.92B 4.33B 4.70B 4.96B
Gross Margin - - - - - - - - - -

Medium Capital Intensity over the past 10 years

NTRS has used a reasonable amount of their financial resources to invest in facilities and equipment required to produce its goods and services. This isn't perfect, but it shouldn't be an area of concern unless this number is strongly trending upwards.

34.08% of Profits are being spent on Capital Expenditures, like Property, Plant, & Equipment, required to run the business.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Capital Expenditure - - 132.60M 90.50M - 239.20M - 409.50M 433.50M 473.40M
divided by
Net Income 726.90M 794.80M 864.20M 669.50M 603.60M 687.30M 727.50M 811.80M 973.80M 1.03B
Capital Expenditure Ratio - - 15.34% 13.52% - 34.80% - 50.44% 44.52% 45.85%

Inconsistent Dividend History over the past 10 years

NTRS has started distributing dividends in the past couple years or has recently suspended their dividend distribution. The reliability of future distributions is unclear.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Dividend Paid 219.50M 247.70M 306.90M 273.20M 273.70M 354.30M - 302.90M 348.40M 356.40M
divided by
Shares Outstanding 224.32M 225.38M 236.42M 242.50M 241.81M 240.88M - 235.83M 234.22M 229.15M
Dividend Paid Per Share 0.98 1.10 1.30 1.13 1.13 1.47 - 1.28 1.49 1.56
Price at Year End 70.34 46.93 50.12 54.06 39.66 49.95 61.72 68.07 72.83 89.05
Dividend Yield 1.39% 2.34% 2.59% 2.08% 2.85% 2.94% - 1.89% 2.04% 1.75%

History of Stock Buybacks over the past 10 years

NTRS has some history of delivering increased value for shareholders in the form of stock buybacks. These have helped improve financial metrics and increase each shareholders' relative ownership stake in the company, due to fewer shares outstanding and holding the same number of shares.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Shares Outstanding 224.32M 225.38M 236.42M 242.50M 241.81M 240.88M - 235.83M 234.22M 229.15M
Stock Bought Back - -0.47% -4.67% -2.51% 0.29% 0.39% - -100.00% 0.69% 2.21%
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