NTRS  Northern Trust Corporation

Exchange

NASDAQ

Sector

Finance

Industry

Major Banks

Market Cap.

20.09B

Vuru Grade

37.08/100

Current Price

$87.93
+0.50 (+0.57%)

Growth Price

$71.96
Overvalued by 18.16%

Stability Price

$86.31
Fairly valued

Company Metrics

  • P/E 19.96
  • P/S 3.92
  • P/B 2.17
  • EPS 4.41
  • Cash ROIC 0.37%
  • Cash Ratio -
  • Dividend 1.68 / 1.88%
  • Avg. Vol. 1.21M
  • Shares 228.48M
  • Market Cap. 20.09B

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

CNA building gets new tenant — and maybe a new name — as Northern Trust ...
Chicago Tribune - Aug 9, 2017
Northern Trust Corp. has leased 462,000 square feet in the 45-story building at 333 S. Wabash Ave., and plans to move 2,500 to 3,000 employees there in 2020 from multiple Chicago locations, spokesman Douglas Holt said.
Northern Trust moving in to 'Big Red' CNA building in 2020 - Chicago Sun-Times
Northern Trust Corporation (NTRS) Stock Rating Reaffirmed by Royal Bank Of Canada
TrueBlueTribune - 8 hours ago
Northern Trust Corporation logo Northern Trust Corporation (NASDAQ:NTRS)'s stock had its “buy” rating restated by research analysts at Royal Bank Of Canada in a research note issued on Friday.
Northern Trust Corporation (NASDAQ:NTRS) Valuation According To Analysts - HiTechFacts
JCP Investment Partners Limited Appoints Northern Trust for Asset Servicing ... - Business Wire (press release)
New president named at Northern Trust asset unit
Pensions & Investments - Jul 22, 2017
Mr. Thomas was named on July 17 to succeed Stephen N. Potter, who will become a vice chairman of parent company Northern Trust Corp. He joined Northern Trust in 2004 and took on the role of managing director and global head of exchange-traded funds ...
Northern Trust Corporation (NTRS) Shares Gap Down Following Weak Earnings - Newburgh Gazette
Wall Street Stock Recommendations: Northern Trust Corporation (NTRS ... - Post Analyst
Insiders Are Selling – Northern Trust Corporation (NASDAQ:NTRS)
Modern Readers - Aug 16, 2017
Here is the rundown on market activity for Northern Trust Corporation (NASDAQ:NTRS). EVP Aileen B. Blake sold 7,762 shares at an average price of $88.45 on August 14th.
Deutsche Bank AG Cuts Northern Trust Corporation (NASDAQ:NTRS) Price Target to ... - BNB Daily (blog)
Northern Trust announces changes in leadership - Illinois Business Daily
John Rogers Comments on Northern Trust Corp
GuruFocus.com - Jul 24, 2017
Another strong contributor to performance was Northern Trust Corp. (NASDAQ:NTRS), up +12.77% in the second quarter. The stock price was buoyed by improving net interest margins and a favorable rate environment.
APG Asset Management NV Has $11.59 Million Position in Northern Trust ... - BNB Daily (blog)
Valuing 2 Stocks Using Ratios and Multiples: Northern Trust Corporation (NTRS ... - AllStockNews
Northern Trust Corporation (NASDAQ:NTRS) Experiences Heavier than Average ...
Modern Readers - Aug 11, 2017
Trading volume for Northern Trust Corporation was 1,831K on Friday. Trading volume was up 79.99% over the stocks average daily volume.
These stock's might change the kismet of Investors: Northern Trust Corporation ... - StockNewsJournal
The Open University of Hong Kong Appoints Northern Trust as Global Custodian
Business Wire (press release) - Jul 31, 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.
Traders Buy Shares of Northern Trust Corporation (NASDAQ:NTRS) on Weakness on ... - BNB Daily (blog)
Traders Take Note: Northern Trust Corporation (NASDAQ:NTRS) Stock Drops ... - CML News
Northern Trust Corporation Put Spreads and Earnings
CML News - Aug 11, 2017
Selling puts is a common option strategy during a bull market, but it turns out that looking at a lower risk put spread, and being rather clever in how we treat earnings, yields powerful results in Northern Trust Corporation (NASDAQ:NTRS) . More ...
Northern Trust to Donate Artwork to Northwestern University's Block Museum of ...
Business Wire (press release) - Aug 8, 2017
CHICAGO--(BUSINESS WIRE)--Northern Trust (Nasdaq: NTRS) announced today that the Northern Trust Purchase Prize, an annual gift of artwork selected from EXPO CHICAGO, will be donated to Northwestern University's Mary & Leigh Block Museum of Art at the ...
Option Trading: Buy or Sell Straddles in Northern Trust Corporation (NASDAQ:NTRS)
CML News - Aug 17, 2017
As we look at Northern Trust Corporation we note that deciding whether to buy or sell options (in this case a straddle) is probably the most important question when it comes to option trading.
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.

$87.93 Current Price

$71.96 Growth Price (DCF)

Overvalued by 18.16%


Growth Rate Assumed by Market: 10.89%


Future Free Cash Flow Growth Rate: 0.0%


Discount Rate: 15.0%


Show Free Cash Flow numbers

$86.31 Stability Price (EPV)

Fairly valued


Discount Rate: 15.0%

$74.69 Book Price

Overvalued by 15.06%


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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