Head to Head Comparison: Northern Trust (NASDAQ:NTRS) vs. Boston Private Financial (NASDAQ:BPFH)

Boston Private Financial (NASDAQ:BPFH) and Northern Trust (NASDAQ:NTRS) are both finance companies, but which is the superior business? We will compare the two companies based on the strength of their analyst recommendations, valuation, dividends, institutional ownership, profitability, earnings and risk.

Risk & Volatility

Boston Private Financial has a beta of 1.11, meaning that its share price is 11% more volatile than the S&P 500. Comparatively, Northern Trust has a beta of 1.22, meaning that its share price is 22% more volatile than the S&P 500.

Profitability

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

Net Margins Return on Equity Return on Assets
Boston Private Financial 22.40% 10.15% 0.92%
Northern Trust 22.10% 15.66% 1.22%

Dividends

Boston Private Financial pays an annual dividend of $0.48 per share and has a dividend yield of 4.1%. Northern Trust pays an annual dividend of $2.80 per share and has a dividend yield of 2.6%. Boston Private Financial pays out 49.5% of its earnings in the form of a dividend. Northern Trust pays out 41.6% 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.

Valuation & Earnings

This table compares Boston Private Financial and Northern Trust’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Boston Private Financial $311.29 million 3.14 $80.38 million $0.97 12.10
Northern Trust $6.66 billion 3.41 $1.56 billion $6.73 15.93

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

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for Boston Private Financial and Northern Trust, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Boston Private Financial 0 0 0 0 N/A
Northern Trust 3 8 4 0 2.07

Northern Trust has a consensus target price of $103.91, indicating a potential downside of 3.10%. Given Northern Trust’s higher probable upside, analysts clearly believe Northern Trust is more favorable than Boston Private Financial.

Institutional & Insider Ownership

93.1% of Boston Private Financial shares are owned by institutional investors. Comparatively, 81.8% of Northern Trust shares are owned by institutional investors. 1.9% of Boston Private Financial shares are owned by insiders. Comparatively, 1.2% of Northern Trust shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Summary

Northern Trust beats Boston Private Financial on 11 of the 15 factors compared between the two stocks.

Boston Private Financial Company Profile

Boston Private Financial Holdings, Inc. operates as the bank holding company for Boston Private Bank & Trust Company that provides a range of banking services in the United States. It operates in three segments: Private Banking, Wealth Management and Trust, and Affiliate Partners. The company accepts deposit products, such as checking accounts, savings and NOW accounts, money market accounts, and certificates of deposit. Its loan products include loans to individuals, such as residential mortgage loans, mortgage loans on investment or vacation properties, unsecured and secured personal lines of credits, home equity loans, and overdraft protection; and loans to businesses consisting of commercial and mortgage loans, revolving lines of credit, working capital loans, equipment financing, community lending programs, and construction and land loans. In addition, it provides wealth management solutions comprising customized investment solutions, wealth planning, trust, and family office services for high net worth individuals and families; services for pension funds, endowments, trusts, foundations and select institutions, mutual funds, and high net worth individuals and their families; and financial planning, tax planning and preparation, estate and insurance planning, retirement planning, charitable planning, and intergenerational gifting and succession planning. As of January 31, 2019, the company operated offices in Boston, New York, Los Angeles, San Francisco, San Jose, and Florida. Boston Private Financial Holdings, Inc. was founded in 1987 and is headquartered in Boston, Massachusetts.

Northern Trust Company Profile

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, Corporate & Institutional Services (C&IS) and Wealth Management. The C&IS 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; 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. The company was founded in 1889 and is headquartered in Chicago, Illinois.

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