NTRS  Northern Trust Corporation

Exchange

NASDAQ

Sector

Finance

Industry

Major Banks

Market Cap.

20.66B

Vuru Grade

37.08/100

Current Price

$90.00
-1.52 (-1.66%)

Growth Price

$71.62
Overvalued by 20.42%

Stability Price

$85.90
Fairly valued

Company Metrics

  • P/E 20.55
  • P/S 4.13
  • P/B 2.31
  • EPS 4.32
  • Cash ROIC 0.37%
  • Cash Ratio -
  • Dividend 1.52 / 1.74 %
  • Avg. Vol. 1.08M
  • Shares 229.56M
  • Market Cap. 20.66B

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 (NTRS) Tops Q1 Earnings on High Revenues
Nasdaq - Apr 25, 2017
Moreover, Northern Trust has a decent earnings surprise history. Before posting earnings beat in Q1, the company delivered positive surprises in two of the prior four quarters.
Northern Trust (NTRS) Q1 2017 Results - Earnings Call Transcript - Seeking Alpha
Northern Trust Corp. Bottom Line Advances 13% In Q1
Nasdaq - Apr 25, 2017
(RTTNews.com) - Northern Trust Corp. ( NTRS ) revealed a profit for its first quarter that increased compared to the same period last year.
Northern Trust Corporation to Webcast First Quarter 2017 Earnings Conference ...
Yahoo Finance - Apr 3, 2017
Northern Trust Corporation announced today that it will webcast its first quarter earnings conference call live on Tuesday, April 25, 2017.
Kentucky Retirement Systems Insurance Trust Fund Invests $614000 in Northern ... - BNB Daily (blog)
Northern Trust wins GB£6.7 Billion Mandate from Northern Ireland Local ...
Yahoo Finance - Apr 27, 2017
Northern Trust (NTRS) has been appointed by Northern Ireland Local Government Officers' Superannuation Committee (NILGOSC) to provide global custody, accounting, securities lending, performance measurement and foreign exchange services for its ...
What's in Store for Northern Trust (NTRS) in Q1 Earnings?
Yahoo Finance - Apr 24, 2017
Northern Trust doesn't have the right combination of the two key ingredients - a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or at least 3 (Hold) - for increasing its chances of an earnings beat.
Robert Ashcroft Joins Northern Trust Wealth Management to Lead Business Owner ...
Yahoo Finance - Apr 17, 2017
For more than 125 years, Northern Trust has earned distinction as an industry leader for exceptional service, financial expertise, integrity and innovation.
Northern Trust to Provide Investment Advisory Services to The Grosse Pointe ... - Business Wire (press release)
MOVES-Citigroup, Northern Trust, Morningstar Credit Ratings - Reuters
The Case for and Against Northern Trust Corporation (NTRS)
StockNewsJournal - Apr 11, 2017
Northern Trust Corporation (NTRS) is an interesting player in the Financial space, with a focus on Asset Management. The stock has been active on the tape, currently trading at $85.52, down from yesterday's close by -0.66%.
Northern Trust Co. (NTRS) Raised to Buy at Jefferies Group LLC - The Cerbat Gem
Jefferies Group LLC upgraded Northern Trust Corporation (NASDAQ:NTRS) to Buy ... - Breaking Finance News
Form 4 NORTHERN TRUST CORP For: Apr 27 Filed by: Bowman Biff
StreetInsider.com - Apr 28, 2017
Check this box if no longer subject to Section 16. Form 4 or Form 5 obligations may continue. See Instruction 1(b). 1. Name and Address of Reporting Person *. Bowman Biff. (Last), (First), (Middle). 50 S. LASALLE STREET. (Street). CHICAGO, IL, 60603 ...
Drilling Down Into Northern Trust Corporation (NTRS)
StockNewsJournal - Apr 4, 2017
Northern Trust Corporation (NTRS) is an interesting player in the Financial space, with a focus on Asset Management. The stock has been active on the tape, currently trading at $86.22, down from yesterday's close by -0.42%.
A look at a High Market Cap Stock: Northern Trust Corporation, NTRS - The Daily Leicester
Large Cap Asset Management: Northern Trust Corporation (NASDAQ:NTRS) - Twin County News
Stock Alert: Northern Trust Corporation Price Volatility Hits An Extreme Low
CML News - Apr 11, 2017
Before we cover the full analysis we make a quick alert here that Northern Trust Corporation (NASDAQ:NTRS) has seen its stock price move at a plunging low level.
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.

$90.00 Current Price

$71.62 Growth Price (DCF)

Overvalued by 20.42%


Growth Rate Assumed by Market: 12.21%


Future Free Cash Flow Growth Rate: 0.0%


Discount Rate: 15.0%


Show Free Cash Flow numbers

$85.90 Stability Price (EPV)

Fairly valued


Discount Rate: 15.0%

$74.63 Book Price

Overvalued by 17.08%


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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