Analyzing Northern Trust (NTRS) & Ameriprise Financial (AMP)
Northern Trust (NASDAQ: NTRS) and Ameriprise Financial (NYSE:AMP) are both large-cap financials companies, but which is the superior business? We will compare the two businesses based on the strength of their institutional ownership, earnings, dividends, analyst recommendations, valuation, risk and profitability.
This is a breakdown of current recommendations for Northern Trust and Ameriprise Financial, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Insider & Institutional Ownership
81.7% of Northern Trust shares are held by institutional investors. Comparatively, 81.6% of Ameriprise Financial shares are held by institutional investors. 1.3% of Northern Trust shares are held by company insiders. Comparatively, 1.5% of Ameriprise Financial shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.
Risk & Volatility
Northern Trust has a beta of 0.96, indicating that its stock price is 4% less volatile than the S&P 500. Comparatively, Ameriprise Financial has a beta of 1.93, indicating that its stock price is 93% more volatile than the S&P 500.
Valuation & Earnings
This table compares Northern Trust and Ameriprise Financial’s gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Northern Trust||$5.14 billion||4.71||$1.03 billion||$4.53||23.53|
|Ameriprise Financial||$11.70 billion||2.24||$1.31 billion||$10.72||16.54|
Ameriprise Financial has higher revenue and earnings than Northern Trust. Ameriprise Financial is trading at a lower price-to-earnings ratio than Northern Trust, indicating that it is currently the more affordable of the two stocks.
Northern Trust pays an annual dividend of $1.68 per share and has a dividend yield of 1.6%. Ameriprise Financial pays an annual dividend of $3.32 per share and has a dividend yield of 1.9%. Northern Trust pays out 37.1% of its earnings in the form of a dividend. Ameriprise Financial pays out 31.0% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Ameriprise Financial has increased its dividend for 8 consecutive years. Ameriprise Financial is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
This table compares Northern Trust and Ameriprise Financial’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Ameriprise Financial beats Northern Trust on 11 of the 16 factors compared between the two stocks.
Northern Trust Company Profile
Northern Trust Corporation is a financial holding company. The Company provides asset servicing, fund administration, asset management, fiduciary and banking solutions for corporations, institutions, families and individuals across the world. Its segments include Corporate & Institutional Services (C&IS), Wealth Management, and Treasury and Other. The C&IS segment is a provider of asset servicing and related services to corporate and public retirement funds, foundations, endowments, fund managers, insurance companies, sovereign wealth funds and other institutional investors around the globe. The Wealth Management segment provides trust, investment management, custody and philanthropic services; financial consulting; guardianship and estate administration; family business consulting; family financial education; brokerage services, and private and business banking. It conducts its business through various subsidiaries.
Ameriprise Financial Company Profile
Ameriprise Financial, Inc. is a financial services company that offers financial solutions to individual and institutional clients. The Company operates in five segments: Advice & Wealth Management; Asset Management; Annuities; Protection, and Corporate & Other. The Company uses Ameriprise Financial as its enterprise brand, as well as the name of its advisor network and certain of its retail products and services. The retail products and services that use the Ameriprise Financial brand include those that it provides through its advisors (financial planning, investment advisory accounts and retail brokerage services) and products and services that the Company markets directly to consumers or through affinity groups (personal auto and home insurance). The Company uses its RiverSource brand for its annuity and protection products issued by the RiverSource Life companies, including its life and disability income insurance products.
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