NTRS  Northern Trust Corporation

Exchange

NASDAQ

Sector

Finance

Industry

Major Banks

Market Cap.

21.70B

Vuru Grade

37.08/100

Current Price

$94.98
+0.40 (+0.42%)

Growth Price

$71.96
Overvalued by 24.23%

Stability Price

$86.31
Overvalued by 9.13%

Company Metrics

  • P/E 21.56
  • P/S 4.24
  • P/B 2.35
  • EPS 4.41
  • Cash ROIC 0.37%
  • Cash Ratio -
  • Dividend 1.68 / 1.81%
  • Avg. Vol. 1.31M
  • Shares 228.47M
  • Market Cap. 21.70B

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 Corporation (NTRS) CEO Frederick Waddell on Q3 2017 Results ...
Seeking Alpha - Oct 18, 2017
Good morning, everyone, and welcome to Northern Trust Corporation's third quarter 2017 earnings conference call. Joining me on our call this morning are Rick Waddell, our Chairman and Chief Executive Officer; Michael Grady, our President, Biff Bowman ...
Northern Trust Corporation (NTRS) Rises 3.82% for October 18 - Equities.com (blog)
Northern Trust Corporation (NTRS): Examining the Technicals - Economic News
Northern Trust Corp. Announces 16% Advance In Q3 Earnings
Nasdaq - Oct 18, 2017
(RTTNews.com) - Northern Trust Corp. ( NTRS ) reported a profit for its third quarter that advanced compared to the same period last year.
Northern Trust Corporation Reports Third Quarter Net Income of $298.4 Million ... - Business Wire (press release)
Northern Trust Corporation – De (NASDAQ:NTRSP) Sees Significantly Lower ... - Modern Readers
Northern Trust (NTRS) Tops Q3 Earnings as Trust Income Rises
Nasdaq - Oct 18, 2017
A rise in trust income drove Northern Trust Corporation 's NTRS earnings surprise of 7.1% in third-quarter 2017. Earnings came in at $1.20 per share, outpacing the Zacks Consensus Estimate of $1.12.
Northern Trust (NTRS) Q3 Earnings & Revenues Beat Estimates October 18, 2017 - Zacks.com
Analyst's Predictions on American Airlines Group Inc. (AAL), Northern Trust ...
StockNewsJournal - Oct 19, 2017
Northern Trust Corporation (NASDAQ:NTRS), maintained return on investment for the last twelve months at -, higher than what Reuters data shows regarding industry's average.
Northern Trust names new CEO
Chicago Business Journal - Oct 17, 2017
Northern Trust Corporation named Michael O'Grady as CEO on Tuesday to replace Frederick Waddell at the start of 2018. O'Grady assumed the role of president of Northern Trust at the beginning of the year, overseeing the wealth management, corporate ...
Northern Trust names O'Grady to become CEO in January; Waddell to retire - Seeking Alpha
Northern Trust Corporation Target of Unusually High Options Trading (NASDAQ:NTRS)
The Ledger Gazette - 7 hours ago
Northern Trust Corporation logo Northern Trust Corporation (NASDAQ:NTRS) saw unusually large options trading activity on Friday.
Head-To-Head Analysis: Northern Trust Corporation (NASDAQ:NTRS) vs. Its Peers - TrueBlueTribune
Northern Trust Corporation (NTRS) to Post Q4 2017 Earnings of $1.34 Per Share ... - Dispatch Tribunal
Northern Trust Corporation to Webcast Third Quarter 2017 Earnings Conference Call
Business Wire (press release) - Sep 27, 2017
CHICAGO--(BUSINESS WIRE)--Northern Trust Corporation announced today that it will webcast its third quarter 2017 earnings conference call live on Wednesday, October 18, 2017.
Northern Trust Corp (NTRS) Chairman and CEO Frederick H Waddell Sold $9.2 ... - GuruFocus.com
Northern Trust Corporation (NASDAQ:NTRS) Stock Rating Upgraded by Zacks ... - The Ledger Gazette
These Stock's are Flying High, But Don't Go Contrarian Yet: Northern Trust ...
StockNewsJournal - 1 hour ago
Northern Trust Corporation (NASDAQ:NTRS) market capitalization at present is $21.79B at the rate of $94.98 a share. The firm's price-to-sales ratio was noted 0.00 in contrast with an overall industry average of 133.61.
ON Semiconductor Corporation (ON) Stake Boosted by Northern Trust Corp
Dispatch Tribunal - 9 hours ago
ON Semiconductor Corporation logo Northern Trust Corp grew its stake in shares of ON Semiconductor Corporation (NASDAQ:ON) by 3.3% during the 2nd quarter, according to the company in its most recent Form 13F filing with the Securities & Exchange ...
Northern Trust Appoints Head of Relationship Management for its Global Fund ...
Business Wire (press release) - Oct 16, 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.
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.

$94.98 Current Price

$71.96 Growth Price (DCF)

Overvalued by 24.23%


Growth Rate Assumed by Market: 14.42%


Future Free Cash Flow Growth Rate: 0.0%


Discount Rate: 15.0%


Show Free Cash Flow numbers

$86.31 Stability Price (EPV)

Overvalued by 9.13%


Discount Rate: 15.0%

$74.69 Book Price

Overvalued by 21.36%


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%
Share your thoughts about NTRS

Sign Up or Log In to start contributing!


Discussion

Nothing here yet. Be the first to post!