NORTHERN TRUST CORP (NTRS) Stock Fundamental Analysis
NASDAQ:NTRS - Nasdaq - US6658591044 - Common Stock - Currency: USD
We assign a fundamental rating of 4 out of 10 to NTRS. NTRS was compared to 225 industry peers in the Capital Markets industry. NTRS has a medium profitability rating, but doesn't score so well on its financial health evaluation. NTRS is not valued too expensively and it also shows a decent growth rate.
1. Profitability
1.1 Basic Checks
NTRS had positive earnings in the past year.
NTRS had a positive operating cash flow in the past year.
Each year in the past 5 years NTRS has been profitable.
Of the past 5 years NTRS 4 years had a positive operating cash flow.
1.2 Ratios
NTRS's Return On Assets of 1.05% is on the low side compared to the rest of the industry. NTRS is outperformed by 66.67% of its industry peers.
With a decent Return On Equity value of 12.80%, NTRS is doing good in the industry, outperforming 67.12% of the companies in the same industry.
The Return On Invested Capital of NTRS (1.21%) is worse than 70.78% of its industry peers.
The Average Return On Invested Capital over the past 3 years for NTRS is significantly below the industry average of 6.81%.
The last Return On Invested Capital (1.21%) for NTRS is above the 3 year average (1.03%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 1.05% | ||
| ROE | 12.8% | ||
| ROIC | 1.21% |
ROA(3y)0.93%
ROA(5y)0.86%
ROE(3y)11.89%
ROE(5y)11.57%
ROIC(3y)1.03%
ROIC(5y)0.94%
1.3 Margins
The Profit Margin of NTRS (11.11%) is comparable to the rest of the industry.
NTRS's Profit Margin has improved in the last couple of years.
With a Operating Margin value of 16.84%, NTRS is not doing good in the industry: 62.56% of the companies in the same industry are doing better.
NTRS's Operating Margin has improved in the last couple of years.
NTRS's Gross Margin of 53.63% is fine compared to the rest of the industry. NTRS outperforms 62.56% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 16.84% | ||
| PM (TTM) | 11.11% | ||
| GM | 53.63% |
OM growth 3Y0.27%
OM growth 5Y1.73%
PM growth 3Y0.74%
PM growth 5Y1.91%
GM growth 3YN/A
GM growth 5YN/A
2. Health
2.1 Basic Checks
The number of shares outstanding for NTRS has been reduced compared to 1 year ago.
NTRS has less shares outstanding than it did 5 years ago.
The debt/assets ratio for NTRS is higher compared to a year ago.
2.2 Solvency
NTRS has an Altman-Z score of -0.58. This is a bad value and indicates that NTRS is not financially healthy and even has some risk of bankruptcy.
NTRS has a Altman-Z score of -0.58. This is amonst the worse of the industry: NTRS underperforms 89.04% of its industry peers.
The Debt to FCF ratio of NTRS is 32.66, which is on the high side as it means it would take NTRS, 32.66 years of fcf income to pay off all of its debts.
NTRS has a Debt to FCF ratio (32.66) which is in line with its industry peers.
A Debt/Equity ratio of 10.82 is on the high side and indicates that NTRS has dependencies on debt financing.
NTRS's Debt to Equity ratio of 10.82 is on the low side compared to the rest of the industry. NTRS is outperformed by 91.32% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 10.82 | ||
| Debt/FCF | 32.66 | ||
| Altman-Z | -0.58 |
ROIC/WACCN/A
WACCN/A
2.3 Liquidity
A Current Ratio of 0.05 indicates that NTRS may have some problems paying its short term obligations.
NTRS has a worse Current ratio (0.05) than 96.35% of its industry peers.
A Quick Ratio of 0.05 indicates that NTRS may have some problems paying its short term obligations.
Looking at the Quick ratio, with a value of 0.05, NTRS is doing worse than 96.35% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.05 | ||
| Quick Ratio | 0.05 |
3. Growth
3.1 Past
NTRS shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 27.91%, which is quite impressive.
Measured over the past 5 years, NTRS shows a small growth in Earnings Per Share. The EPS has been growing by 2.76% on average per year.
NTRS shows a strong growth in Revenue. In the last year, the Revenue has grown by 20.65%.
The Revenue has been growing slightly by 4.66% on average over the past years.
EPS 1Y (TTM)27.91%
EPS 3Y2.26%
EPS 5Y2.76%
EPS Q2Q%54.79%
Revenue 1Y (TTM)20.65%
Revenue growth 3Y8.98%
Revenue growth 5Y4.66%
Sales Q2Q%25.35%
3.2 Future
NTRS is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 8.18% yearly.
The Revenue is expected to grow by 4.53% on average over the next years.
EPS Next Y9.14%
EPS Next 2Y8.24%
EPS Next 3Y8.87%
EPS Next 5Y8.18%
Revenue Next Year4.88%
Revenue Next 2Y4.51%
Revenue Next 3Y4.53%
Revenue Next 5YN/A
3.3 Evolution
The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
The Revenue growth rate is stable: in the next years the growth will be about the same than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
The Price/Earnings ratio is 14.21, which indicates a correct valuation of NTRS.
NTRS's Price/Earnings ratio is in line with the industry average.
The average S&P500 Price/Earnings ratio is at 29.98. NTRS is valued rather cheaply when compared to this.
With a Price/Forward Earnings ratio of 13.02, NTRS is valued correctly.
The rest of the industry has a similar Price/Forward Earnings ratio as NTRS.
Compared to an average S&P500 Price/Forward Earnings ratio of 22.66, NTRS is valued a bit cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 14.21 | ||
| Fwd PE | 13.02 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, NTRS is valued cheaper than 91.78% of the companies in the same industry.
83.56% of the companies in the same industry are more expensive than NTRS, based on the Price/Free Cash Flow ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 5.08 | ||
| EV/EBITDA | 7.25 |
4.3 Compensation for Growth
The PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
PEG (NY)1.55
PEG (5Y)5.15
EPS Next 2Y8.24%
EPS Next 3Y8.87%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 2.75%, NTRS has a reasonable but not impressive dividend return.
NTRS's Dividend Yield is comparable with the industry average which is at 8.75.
NTRS's Dividend Yield is comparable with the S&P500 average which is at 2.30.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.75% |
5.2 History
The dividend of NTRS is nicely growing with an annual growth rate of 9.60%!
NTRS has paid a dividend for at least 10 years, which is a reliable track record.
NTRS has not decreased their dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)9.6%
Div Incr Years2
Div Non Decr Years25
5.3 Sustainability
NTRS pays out 39.87% of its income as dividend. This is a sustainable payout ratio.
NTRS's earnings are growing slower than its dividend. This means the dividend growth is not sustainable.
DP39.87%
EPS Next 2Y8.24%
EPS Next 3Y8.87%
109.4
-0.82 (-0.74%)
Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupFinancial Services
GICS IndustryCapital Markets
Earnings (Last)
Earnings (Next)
Inst Owners87.01%
Inst Owner Change0.02%
Ins Owners0.79%
Ins Owner Change12.46%
Market Cap21.44B
Analysts67.27
Price Target120.52 (10.16%)
Short Float %1.17%
Short Ratio1.83
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.75% |
Yearly Dividend3.21
Dividend Growth(5Y)9.6%
DP39.87%
Div Incr Years2
Div Non Decr Years25
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)1.19%
Min EPS beat(2)-8.4%
Max EPS beat(2)10.78%
EPS beat(4)3
Avg EPS beat(4)8.83%
Min EPS beat(4)-8.4%
Max EPS beat(4)18.24%
EPS beat(8)3
Avg EPS beat(8)-4.52%
EPS beat(12)5
Avg EPS beat(12)-3.03%
EPS beat(16)8
Avg EPS beat(16)-1.1%
Revenue beat(2)0
Avg Revenue beat(2)-5.97%
Min Revenue beat(2)-11.65%
Max Revenue beat(2)-0.29%
Revenue beat(4)1
Avg Revenue beat(4)-4.56%
Min Revenue beat(4)-11.65%
Max Revenue beat(4)3.39%
Revenue beat(8)2
Avg Revenue beat(8)-1.59%
Revenue beat(12)4
Avg Revenue beat(12)-0.56%
Revenue beat(16)5
Avg Revenue beat(16)-0.69%
PT rev (1m)0.66%
PT rev (3m)13.23%
EPS NQ rev (1m)2.3%
EPS NQ rev (3m)2.3%
EPS NY rev (1m)1.46%
EPS NY rev (3m)7.85%
Revenue NQ rev (1m)0.41%
Revenue NQ rev (3m)0.41%
Revenue NY rev (1m)0.96%
Revenue NY rev (3m)1.86%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 14.21 | ||
| Fwd PE | 13.02 | ||
| P/S | 1.46 | ||
| P/FCF | 5.08 | ||
| P/OCF | 4.33 | ||
| P/B | 1.68 | ||
| P/tB | 2.16 | ||
| EV/EBITDA | 7.25 |
EPS(TTM)7.7
EY7.04%
EPS(NY)8.4
Fwd EY7.68%
FCF(TTM)21.55
FCFY19.7%
OCF(TTM)25.27
OCFY23.1%
SpS74.94
BVpS65.06
TBVpS50.61
PEG (NY)1.55
PEG (5Y)5.15
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 1.05% | ||
| ROE | 12.8% | ||
| ROCE | 10% | ||
| ROIC | 1.21% | ||
| ROICexc | 1.25% | ||
| ROICexgc | 1.35% | ||
| OM | 16.84% | ||
| PM (TTM) | 11.11% | ||
| GM | 53.63% | ||
| FCFM | 28.75% |
ROA(3y)0.93%
ROA(5y)0.86%
ROE(3y)11.89%
ROE(5y)11.57%
ROIC(3y)1.03%
ROIC(5y)0.94%
ROICexc(3y)1.06%
ROICexc(5y)0.97%
ROICexgc(3y)1.15%
ROICexgc(5y)1.04%
ROCE(3y)9.78%
ROCE(5y)9.54%
ROICexcg growth 3Y15.7%
ROICexcg growth 5Y2.49%
ROICexc growth 3Y14.95%
ROICexc growth 5Y2.43%
OM growth 3Y0.27%
OM growth 5Y1.73%
PM growth 3Y0.74%
PM growth 5Y1.91%
GM growth 3YN/A
GM growth 5YN/A
F-Score8
Asset Turnover0.09
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 10.82 | ||
| Debt/FCF | 32.66 | ||
| Debt/EBITDA | 43.43 | ||
| Cap/Depr | 103.76% | ||
| Cap/Sales | 4.97% | ||
| Interest Coverage | 0.33 | ||
| Cash Conversion | 155.93% | ||
| Profit Quality | 258.74% | ||
| Current Ratio | 0.05 | ||
| Quick Ratio | 0.05 | ||
| Altman-Z | -0.58 |
F-Score8
WACCN/A
ROIC/WACCN/A
Cap/Depr(3y)N/A
Cap/Depr(5y)N/A
Cap/Sales(3y)N/A
Cap/Sales(5y)N/A
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)27.91%
EPS 3Y2.26%
EPS 5Y2.76%
EPS Q2Q%54.79%
EPS Next Y9.14%
EPS Next 2Y8.24%
EPS Next 3Y8.87%
EPS Next 5Y8.18%
Revenue 1Y (TTM)20.65%
Revenue growth 3Y8.98%
Revenue growth 5Y4.66%
Sales Q2Q%25.35%
Revenue Next Year4.88%
Revenue Next 2Y4.51%
Revenue Next 3Y4.53%
Revenue Next 5YN/A
EBIT growth 1Y59.24%
EBIT growth 3Y9.28%
EBIT growth 5Y6.47%
EBIT Next Year-10.99%
EBIT Next 3Y-1.58%
EBIT Next 5YN/A
FCF growth 1Y28.69%
FCF growth 3YN/A
FCF growth 5YN/A
OCF growth 1Y24.6%
OCF growth 3YN/A
OCF growth 5YN/A