U.S. Bancorp (USB) vs. Northern Trust (NTRS) Head-To-Head Comparison

U.S. Bancorp (NYSE: USB) and Northern Trust (NASDAQ:NTRS) are both large-cap finance companies, but which is the superior stock? We will compare the two businesses based on the strength of their institutional ownership, analyst recommendations, dividends, profitability, valuation, risk and earnings.

Insider & Institutional Ownership

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74.2% of U.S. Bancorp shares are owned by institutional investors. Comparatively, 79.7% of Northern Trust shares are owned by institutional investors. 0.4% of U.S. Bancorp shares are owned by company insiders. Comparatively, 1.0% of Northern Trust shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Volatility & Risk

U.S. Bancorp has a beta of 0.89, suggesting that its share price is 11% less volatile than the S&P 500. Comparatively, Northern Trust has a beta of 0.95, suggesting that its share price is 5% less volatile than the S&P 500.

Analyst Ratings

This is a summary of current ratings and target prices for U.S. Bancorp and Northern Trust, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
U.S. Bancorp 3 8 6 0 2.18
Northern Trust 1 9 4 0 2.21

U.S. Bancorp presently has a consensus price target of $58.22, indicating a potential upside of 18.21%. Northern Trust has a consensus price target of $104.14, indicating a potential upside of 4.72%. Given U.S. Bancorp’s higher probable upside, equities analysts clearly believe U.S. Bancorp is more favorable than Northern Trust.

Earnings & Valuation

This table compares U.S. Bancorp and Northern Trust’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
U.S. Bancorp $24.00 billion 3.39 $6.22 billion $3.52 13.99
Northern Trust $5.72 billion 3.93 $1.20 billion $4.92 20.21

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

Dividends

U.S. Bancorp pays an annual dividend of $1.20 per share and has a dividend yield of 2.4%. Northern Trust pays an annual dividend of $1.68 per share and has a dividend yield of 1.7%. U.S. Bancorp pays out 34.1% of its earnings in the form of a dividend. Northern Trust pays out 34.1% 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. Northern Trust has increased its dividend for 7 consecutive years. U.S. Bancorp is clearly the better dividend stock, given its higher yield and lower payout ratio.

Profitability

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

Net Margins Return on Equity Return on Assets
U.S. Bancorp 25.91% 13.89% 1.32%
Northern Trust 20.98% 12.77% 0.91%

Summary

U.S. Bancorp beats Northern Trust on 9 of the 17 factors compared between the two stocks.

About U.S. Bancorp

U.S. Bancorp is a multi-state financial services holding company. The Company provides a full range of financial services, including lending and depository services, cash management, capital markets, and trust and investment management services. It also engages in credit card services, merchant and automated teller machine (ATM) processing, mortgage banking, insurance, brokerage and leasing. The Company’s banking subsidiary, U.S. Bank National Association, is engaged in the general banking business, principally in domestic markets. U.S. Bank National Association provides a range of products and services to individuals, businesses, institutional organizations, governmental entities and other financial institutions. As of December 31, 2016, the Company’s loan portfolio was $273.2 billion. As of December 31, 2016, its investment securities amounted to $109.3 billion. As of December 31, 2016, the Company’s deposits amounted to $334,590 billion.

About Northern Trust

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.

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