Northern Trust Corporation (NASDAQ: NTRS) and Franklin Resources (NYSE:BEN) are both large-cap finance companies, but which is the superior stock? We will contrast the two companies based on the strength of their risk, analyst recommendations, dividends, earnings, profitabiliy, valuation and institutional ownership.
This table compares Northern Trust Corporation and Franklin Resources’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Northern Trust Corporation||20.20%||11.96%||0.87%|
Volatility & Risk
Northern Trust Corporation has a beta of 0.97, meaning that its share price is 3% less volatile than the S&P 500. Comparatively, Franklin Resources has a beta of 1.73, meaning that its share price is 73% more volatile than the S&P 500.
Valuation and Earnings
This table compares Northern Trust Corporation and Franklin Resources’ gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Northern Trust Corporation||$5.09 billion||4.30||$1.00 billion||$4.37||21.81|
|Franklin Resources||$6.41 billion||3.93||$2.35 billion||$3.10||14.46|
Franklin Resources has higher revenue and earnings than Northern Trust Corporation. Franklin Resources is trading at a lower price-to-earnings ratio than Northern Trust Corporation, indicating that it is currently the more affordable of the two stocks.
Institutional and Insider Ownership
82.9% of Northern Trust Corporation shares are owned by institutional investors. Comparatively, 45.5% of Franklin Resources shares are owned by institutional investors. 1.3% of Northern Trust Corporation shares are owned by insiders. Comparatively, 21.6% of Franklin Resources shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.
This is a breakdown of current recommendations and price targets for Northern Trust Corporation and Franklin Resources, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Northern Trust Corporation||0||5||3||1||2.56|
Northern Trust Corporation currently has a consensus price target of $91.11, suggesting a potential downside of 4.40%. Franklin Resources has a consensus price target of $39.13, suggesting a potential downside of 12.75%. Given Northern Trust Corporation’s stronger consensus rating and higher possible upside, research analysts clearly believe Northern Trust Corporation is more favorable than Franklin Resources.
Northern Trust Corporation pays an annual dividend of $1.52 per share and has a dividend yield of 1.6%. Franklin Resources pays an annual dividend of $0.80 per share and has a dividend yield of 1.8%. Northern Trust Corporation pays out 34.8% of its earnings in the form of a dividend. Franklin Resources pays out 25.8% 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. Franklin Resources has increased its dividend for 35 consecutive years. Franklin Resources is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Franklin Resources beats Northern Trust Corporation on 10 of the 18 factors compared between the two stocks.
Northern Trust Corporation 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.
Franklin Resources Company Profile
Franklin Resources, Inc. is a holding company. The Company, along with its subsidiaries, operates as Franklin Templeton Investments. It is a global investment management company that provides investment management and related services to retail, institutional and high net-worth clients in jurisdictions around the world. The Company offers its investment products and services under the Franklin, Templeton, Franklin Mutual Series, Franklin Bissett, Fiduciary Trust, Darby, Balanced Equity Management, K2 and LibertyShares brand names. Its products include investment funds and institutional, high net-worth and separately managed accounts (collectively, sponsored investment products (SIPs)). It offers various types of SIPs, such as the United States funds, cross-border funds, local/regional funds, and other managed accounts, alternative investment products and trusts. Its investment funds include the United States-registered funds, non-United States-registered funds and unregistered funds.
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