Northern Trust reported a solid third quarter on Oct. 21. Excluding notable items, revenue rose 11%, and expenses rose 5%. Pretax income grew by 21%, while adjusted EPS grew 40%, driven by an abnormally low tax rate. Shares were mostly flat in intraday trading.
Northern Trust has built a strong wealth-management franchise. Its reputation and conservative capital allocation help its capture and retain ultrawealthy private banking clients. In addition, these wealth-management relationships are stickier and client AUM has less exposure to equities compared with other wealth managers.
Fee compression and lower margins in the asset-management industry will result in asset managers being more conscious of their costs, thus limiting the pricing power of custody banks.
|
Metric
|
NTRS
|
SEIC
|
|---|---|---|
Price/Earnings (Normalized) | 13.37 | 17.52 |
Price/Book Value | 2.46 | 4.84 |
Price/Sales | 3.35 | 5.00 |
Price/Cash Flow | 12.19 | 18.30 |
|
Metric
|
NTRS
|
SEIC
|
|---|---|---|
Quick Ratio | — | 4.76 |
Current Ratio | — | 5.06 |
Interest Coverage | — | 642.72 |
|
Metric
|
NTRS
|
SEIC
|
|---|---|---|
Return on Assets (Normalized) | — | 24.60% |
Return on Equity (Normalized) | — | 31.07% |
Return on Invested Capital (Normalized) | — | 27.40% |
|
1-Day Chart
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Name
|
Price
|
Morningstar Rating for Stocks
|
Capital Allocation
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Economic Moat
|
Market Cap
|
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United States