Comparing Northern Trust (NASDAQ:NTRS) and Bakkt (NYSE:BKKT)

Bakkt (NYSE:BKKT) and Northern Trust (NASDAQ:NTRS) are both finance companies, but which is the better investment? We will contrast the two companies based on the strength of their institutional ownership, valuation, earnings, profitability, risk, analyst recommendations and dividends.

Risk & Volatility

Bakkt has a beta of 6.06, suggesting that its stock price is 506% more volatile than the S&P 500. Comparatively, Northern Trust has a beta of 1.24, suggesting that its stock price is 24% more volatile than the S&P 500.

Profitability

This table compares Bakkt and Northern Trust’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Bakkt	-2.78%	-41.11%	-30.36%
Northern Trust	15.86%	17.97%	1.27%

Valuation and Earnings

This table compares Bakkt and Northern Trust”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Bakkt	$2.34 billion	0.10	-$107.21 million	$0.45	11.34
Northern Trust	$14.30 billion	2.18	$1.74 billion	$12.76	13.35

Northern Trust has higher revenue and earnings than Bakkt. Bakkt is trading at a lower price-to-earnings ratio than Northern Trust, indicating that it is currently the more affordable of the two stocks.

Institutional & Insider Ownership

11.1% of Bakkt shares are held by institutional investors. Comparatively, 83.2% of Northern Trust shares are held by institutional investors. 10.1% of Bakkt shares are held by insiders. Comparatively, 0.7% of Northern Trust shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Analyst Recommendations

This is a summary of current ratings for Bakkt and Northern Trust, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Bakkt	1	0	1	0	2.00
Northern Trust	2	10	3	0	2.07

Bakkt currently has a consensus target price of $12.00, suggesting a potential upside of 135.06%. Northern Trust has a consensus target price of $183.47, suggesting a potential upside of 7.70%. Given Bakkt’s higher possible upside, equities analysts plainly believe Bakkt is more favorable than Northern Trust.

Summary

Northern Trust beats Bakkt on 11 of the 14 factors compared between the two stocks.

About Bakkt

Bakkt Holdings, Inc. offers software as a service and application programming interface solutions for crypto and loyalty, powering engagement, and performance. The company operates Bakkt Marketplace, a platform that enables consumers to buy, sell, and store crypto in an embedded web experience; Bakkt Crypto, a platform that supports clients with a range of crypto solutions; and Bakkt Trust, institutional-grade qualified custody solution for market participants. Its platform also offers a range of loyalty solutions, including redemption solutions for various rewards categories comprising travel, gift cards, and merchandise; travel solutions that offer a retail e-commerce booking platform, as well as live-agent booking and servicing; and unified shopping experience. The company was founded in 2018 and is headquartered in Alpharetta, Georgia.

About Northern Trust

Northern Trust Corporation, a financial holding company, provides wealth management, asset servicing, asset management, and banking solutions for corporations, institutions, families, and individuals worldwide. It operates in two segments, Asset Servicing and Wealth Management. The Asset Servicing segment offers asset servicing and related services, including custody, fund administration, investment operations outsourcing, investment management, investment risk and analytical services, employee benefit services, securities lending, foreign exchange, treasury management, brokerage services, transition management services, banking, and cash management services. This segment serves corporate and public retirement funds, foundations, endowments, fund managers, insurance companies, sovereign wealth funds, and other institutional investors. The Wealth Management segment offers trust, investment management, custody, and philanthropic; financial consulting; guardianship and estate administration; family business consulting; family financial education; brokerage services; and private and business banking services. This segment serves high-net-worth individuals and families, business owners, executives, professionals, retirees, and established privately held businesses. The company also provides asset management services, such as active and passive equity; active and passive fixed income; cash management; muti-asset and alternative asset classes comprising private equity and hedge funds of funds; and multi-manager advisory services and products through separately managed accounts, bank common and collective funds, registered investment companies, exchange traded funds, non-U.S. collective investment funds, and unregistered private investment funds. In addition, it offers overlay and other risk management services. Northern Trust Corporation was founded in 1889 and is headquartered in Chicago, Illinois.