STT  State Street Corp

Exchange

NYSE

Sector

Finance

Industry

Major Banks

Market Cap.

34.40B

Vuru Grade

54.93/100

Current Price

$92.00
-1.29 (-1.38%)

Growth Price

$85.61
Overvalued by 6.94%

Stability Price

$267.60
Undervalued by 190.87%

Company Metrics

  • P/E 16.99
  • P/S 3.28
  • P/B 1.85
  • EPS 5.42
  • Cash ROIC 0.30%
  • Cash Ratio -
  • Dividend 1.68 / 1.8%
  • Avg. Vol. 1.78M
  • Shares 373.91M
  • Market Cap. 34.40B

Company Description

State Street Corporation, through its subsidiaries, provides various financial services and products to the institutional investors worldwide. Its Investment Servicing business line offers services, such as custody, product-and participant-level accounting, daily pricing, and administration; master trust and master custody; recordkeeping; foreign exchange, brokerage, and other trading services; se... more


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

News

State Street Corp. CEO retiring
Worcester Telegram - Nov 7, 2017
BOSTON - The winds of change are blowing through State Street Corp., one of the state's biggest employers. The company announced Tuesday that Jay Hooley will retire as CEO by the end of 2018 after more than 30 years with the company, but he will ...
State Street CEO, President Plan to Retire - Wall Street Journal
No Shake Up In State Street Succession CEO Plan - Barron's
State Street: Wait For Drop Into Mid-80s
Seeking Alpha - Nov 2, 2017
State Street Corporation (STT) traces its roots back to the founding of Boston's banking industry in the late 18th century.
State Street opens CoE in Hyderabad
Zee Business - 21 hours ago
Jay Hooley, State Street's chairman and chief executive officer, who was in India to officially open the new offices, said the company established a presence in India 10 years ago and has become a key component of the Centre of Excellence network.
State Street Corp Increases Holdings in Mueller Industries, Inc. (NYSE:MLI)
The Ledger Gazette - 8 hours ago
Mueller Industries logo State Street Corp raised its stake in Mueller Industries, Inc. (NYSE:MLI) by 3.7% in the 2nd quarter, according to the company in its most recent disclosure with the Securities & Exchange Commission.
State Street Corporation Announces Results of Its 2017 Mid-Cycle Stress Test
Business Wire (press release) - Oct 26, 2017
BOSTON--(BUSINESS WIRE)--State Street Corporation (NYSE:STT) today announced the results of its 2017 mid-cycle stress test.
State Street CEO-designate says law school plagiarism was a 'very big mistake'
The Boston Globe - Nov 9, 2017
In a career spanning more than three decades, Ronald P. O'Hanley III has climbed up the ranks of several prestigious financial firms, and this week he capped that ascent when he was named the next chief executive of State Street Corp., a Boston ...
State Street CEO to retire - Super Review
LHC Group (LHCG) Position Raised by State Street Corp
The Ledger Gazette - 21 hours ago
LHC Group logo State Street Corp boosted its position in shares of LHC Group (NASDAQ:LHCG) by 7.5% during the 2nd quarter, according to its most recent Form 13F filing with the Securities and Exchange Commission.
OraSure Technologies, Inc. (OSUR) Shares Bought by State Street Corp
The Ledger Gazette - 21 hours ago
OraSure Technologies logo State Street Corp boosted its position in OraSure Technologies, Inc. (NASDAQ:OSUR) by 6.9% during the 2nd quarter, according to its most recent 13F filing with the Securities and Exchange Commission (SEC).
Hannah M. Grove Sells 3200 Shares of State Street Corporation (NYSE:STT) Stock
The Ledger Gazette - 7 hours ago
State Street Corporation logo State Street Corporation (NYSE:STT) insider Hannah M. Grove sold 3,200 shares of the firm's stock in a transaction that occurred on Thursday, November 2nd.
State Street Corporation (NYSE:STT) Shares Sold by Canada Pension Plan ... - TrueBlueTribune
Diehard Bargain Hunter: State Street Corporation (STT), PHH Corporation (PHH) - AllStockNews
(NYSE:CBF) Stake Lifted by State Street Corp
The Ledger Gazette - 8 hours ago
logo State Street Corp lifted its holdings in shares of (NYSE:CBF) by 39.0% during the second quarter, according to the company in its most recent Form 13F filing with the Securities and Exchange Commission.
Growth Rate Assumed by Market

We did a reverse valuation to calculate the growth rate the market is assuming for STT 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 STT'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.

$92.00 Current Price

$85.61 Growth Price (DCF)

Overvalued by 6.94%


Growth Rate Assumed by Market: 5.07%


Future Free Cash Flow Growth Rate: 0.0%


Discount Rate: 15.0%


Show Free Cash Flow numbers

$267.60 Stability Price (EPV)

Undervalued by 190.87%


Discount Rate: 15.0%

$75.87 Book Price

Overvalued by 17.53%


Poor Cash Return on Invested Capital over the past 5 years

STT 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.

STT has only created $0.30 of cash for every $100 invested.
Figures in USD. Fiscal year ends in December
20122013201420152016
Free Cash Flow 590.00M 2.63B 942.00M -2.11B 1.68B
divided by
Invested Capital 222.58B 243.29B 274.12B 245.19B 242.70B
Cash ROIC 0.27% 1.08% 0.34% -0.86% 0.69%

Poor Return on Equity over the past 5 years

STT has shown an inability to deliver strong results for shareholders. This could be due to poor management, STT operating in a highly competitive industry, or having a weak business in general.

STT has only generated $9.87 of Earnings for every $100 of Shareholders' Equity.
Figures in USD. Fiscal year ends in December
20122013201420152016
Net Income 2.06B 2.14B 2.04B 1.98B 2.14B
divided by
Stockholders' Equity 20.87B 20.38B 21.47B 21.10B 21.22B
Return on Equity 9.88% 10.48% 9.49% 9.38% 10.10%

Good Business Performance over the past 10 years

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

STT 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 2.94B -1.96B -4.59B 561.00M 3.37B 590.00M 2.63B 942.00M -2.11B 1.68B

Weak Balance Sheet

STT's financial position is not ideal. The key is to check whether STT 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 142.54B 173.63B 157.95B 160.51B 216.83B 222.58B 243.29B 274.12B 245.19B 242.70B
Current Liabilities - - - - - - - - - -
Total Liabilities 131.24B 160.86B 143.46B 142.72B 197.43B 201.71B 222.91B 252.65B 224.09B 221.48B
Stockholder' Equity 11.30B 12.77B 14.49B 17.79B 19.40B 20.87B 20.38B 21.47B 21.10B 21.22B
Current Ratio - - - - - - - - - -
TL-to-TA 0.92 0.93 0.91 0.89 0.91 0.91 0.92 0.92 0.91 0.91

Consistent Reinvestment of Profits over the past 10 years

STT has consistently retained profits. This may put STT in a strong position to invest for the future, by buying new machinery, investing in R&D or a number of other options. By effectively using these earnings, STT can greatly improve their long-term economic picture.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Retained Earnings 7.75B 9.14B 7.07B 8.63B 10.18B 11.75B 13.40B 14.88B 16.05B 17.46B
Retained Earnings Growth - 17.95% -22.59% 22.10% 17.86% 15.48% 13.99% 11.10% 7.84% 8.79%

Inconsistent Net Profit Margins over the past 10 years

STT potentially has a competitive advantage, however inconsistent profit margins are a cause for concern. Look at reasons for this inconsistency to determine the likelihood of future sustainability.

$14.78 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 1.26B 1.81B -1.88B 1.56B 1.92B 2.06B 2.14B 2.04B 1.98B 2.14B
divided by
Revenue 8.34B 10.69B 7.71B 8.95B 9.66B 9.65B 9.88B 10.30B 10.36B 10.21B
Net Profit Margin 15.13% 16.94% -24.39% 17.38% 19.87% 21.36% 21.61% 19.79% 19.11% 21.00%

Weak Pricing Power over the past 10 years

STT is likely in a highly competitive industry, due to low barriers to entry. It's because of this, that STT 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 8.34B 10.69B 7.71B 8.95B 9.66B 9.65B 9.88B 10.30B 10.36B 10.21B
Gross Margin - - - - - - - - - -

Low Capital Intensity over the past 10 years

STT has consistently used a small portion of their Net Income buying new equipment or investing in new facilities. This indicates that STT may require minimal investment to stay competitive. This leaves them with extra money to spend on growing their business and potentially buying back stock.

22.88% 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 - - 325.00M 262.00M - 355.00M 388.00M 427.00M 703.00M 613.00M
divided by
Net Income 1.26B 1.81B -1.88B 1.56B 1.92B 2.06B 2.14B 2.04B 1.98B 2.14B
Capital Expenditure Ratio - - -17.28% 16.84% - 17.22% 18.16% 20.96% 35.51% 28.60%

Very Strong Dividend History over the past 10 years

STT has consistently distributed a dividend for at least the past 10 years. Such a long dividend history suggests STT is very established in its market and that its dividend distribution is likely to continue for a significant period of time.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Dividend Paid 301.00M 399.00M 168.00M 20.00M 295.00M 463.00M 486.00M 539.00M 655.00M 723.00M
divided by
Shares Outstanding 365.49M 416.10M 474.00M 497.92M 496.07M 481.13M 455.16M 432.01M 413.64M 396.09M
Dividend Paid Per Share 0.82 0.96 0.35 0.04 0.59 0.96 1.07 1.25 1.58 1.83
Price at Year End 77.73 36.81 43.05 45.43 40.31 46.05 72.66 79.21 66.57 77.72
Dividend Yield 1.06% 2.61% 0.82% 0.09% 1.48% 2.09% 1.47% 1.58% 2.38% 2.35%

Strong History of Stock Buybacks over the past 10 years

STT has a strong 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 365.49M 416.10M 474.00M 497.92M 496.07M 481.13M 455.16M 432.01M 413.64M 396.09M
Stock Bought Back - -12.16% -12.22% -4.80% 0.37% 3.11% 5.71% 5.36% 4.44% 4.43%
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