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State Street Corporation STT

Morningstar Rating
$73.37 −0.11 (0.15%)
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Company Report

State Street's Fee Income Is Stable but Its Net Interest Income Is a Swing Factor for Profitability

State Street provides a range of asset servicing and ancillary servicing, including maintaining custody of assets, fund administration, record-keeping, securities lending, foreign-exchange trading services, and data services to institutional asset owners and asset managers. Although State Street is a market leader, its asset manager and asset owner clients are sophisticated on the pricing of its custody and ancillary services. In addition, as asset managers consolidate and face industrywide fee pressure, they are increasingly seeking operating expense savings. State Street saw pricing compression of 4% in 2018 and 2019, though it did moderate to about a 2% headwind in 2020, 2021, and 2022. The rapid rise in interest rates during 2022 helped the custody banks expand their net interest income but in 2024 higher funding costs are proving to be a headwind. While net interest income may only make up about 20%-25% of State Street's revenue, there is little incremental operating cost to this revenue and thus net interest income is an important profitability driver.

Price vs Fair Value

STT is trading at a 5% premium.
Price
$73.37
Fair Value
$53.00
Uncertainty
High
1-Star Price
$891.20
5-Star Price
$14.00
Economic Moat
Kqg
Capital Allocation
Mszqlnz

Bulls Say, Bears Say

Bulls

With the acquisition of Charles River Development, State Street’s front-to-back offerings offer competitive advantages and should lead to a greater wallet share of clients and stickier client relationships.

Bears

Fee compression and lower margins in the asset-management industry could result in asset managers being more conscious of their costs and limit the pricing power of custody banks. Pricing power can also manifest itself in higher funding costs on deposits.

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News

Trading Information

Previous Close Price
$73.48
Day Range
$73.1874.30
52-Week Range
$62.7891.15
Bid/Ask
$73.55 / $74.27
Market Cap
$22.15 Bil
Volume/Avg
43 / 2.2 Mil

Key Statistics

Price/Earnings (Normalized)
9.58
Price/Sales
2.01
Dividend Yield (Trailing)
3.60%
Dividend Yield (Forward)
3.76%
Total Yield
21.09%

Company Profile

State Street is a leading provider of financial services, including investment servicing, investment management, and investment research and trading. With approximately $42 trillion in assets under custody and administration and $4.1 trillion assets under management as of Dec. 31, 2023, State Street operates globally in more than 100 geographic markets and employs more than 46,000 worldwide.
Sector
Financial Services
Industry
Asset Management
Stock Style Box
Mid Value
Total Number of Employees
46,000

Competitors

Valuation

Metric
STT
NTRS
BK
Price/Earnings (Normalized)
9.5812.9610.95
Price/Book Value
1.021.521.15
Price/Sales
2.012.502.56
Price/Cash Flow
7.406.398.09
Price/Earnings
STT
NTRS
BK

Financial Strength

Metric
STT
NTRS
BK
Quick Ratio
Current Ratio
Interest Coverage
Quick Ratio
No chart available

Profitability

Metric
STT
NTRS
BK
Return on Assets (Normalized)
0.85%0.75%0.89%
Return on Equity (Normalized)
11.19%10.55%10.40%
Return on Invested Capital (Normalized)
Return on Assets
STT
NTRS
BK
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Economic Moat
Market Cap
BLK
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BX
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KKR
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BK
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AMP
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TROW
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NTRS
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CG
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BEN
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