Noah Holdings (NYSE: NOAH) and Northern Trust Corporation (NASDAQ:NTRS) are both finance companies, but which is the superior business? We will contrast the two businesses based on the strength of their earnings, risk, valuation, dividends, institutional ownership, profitability and analyst recommendations.

Earnings and Valuation

This table compares Noah Holdings and Northern Trust Corporation’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Noah Holdings $390.11 million 4.53 $113.90 million $1.67 18.77
Northern Trust Corporation $5.09 billion 3.98 $1.01 billion $4.40 20.15

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

Analyst Recommendations

This is a summary of recent ratings and target prices for Noah Holdings and Northern Trust Corporation, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Noah Holdings 0 0 1 0 3.00
Northern Trust Corporation 1 6 3 1 2.36

Noah Holdings presently has a consensus price target of $29.00, indicating a potential downside of 7.50%. Northern Trust Corporation has a consensus price target of $94.64, indicating a potential upside of 6.76%. Given Northern Trust Corporation’s higher probable upside, analysts plainly believe Northern Trust Corporation is more favorable than Noah Holdings.

Institutional and Insider Ownership

42.7% of Noah Holdings shares are owned by institutional investors. Comparatively, 82.9% of Northern Trust Corporation shares are owned by institutional investors. 1.3% of Northern Trust Corporation shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Profitability

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

Net Margins Return on Equity Return on Assets
Noah Holdings 29.01% 19.37% 12.16%
Northern Trust Corporation 20.21% 12.08% 0.88%

Volatility and Risk

Noah Holdings has a beta of 2.33, indicating that its share price is 133% more volatile than the S&P 500. Comparatively, Northern Trust Corporation has a beta of 0.92, indicating that its share price is 8% less volatile than the S&P 500.

Dividends

Northern Trust Corporation pays an annual dividend of $1.52 per share and has a dividend yield of 1.7%. Noah Holdings does not pay a dividend. Northern Trust Corporation pays out 34.5% of its earnings in the form of a dividend.

Summary

Northern Trust Corporation beats Noah Holdings on 10 of the 17 factors compared between the two stocks.

About Noah Holdings

Noah Holdings Limited is a wealth management service provider with a focus on global wealth investment and asset allocation services for high net worth individuals and enterprises in China. The Company operates through three segments: wealth management, asset management and Internet finance. It also provides Internet finance services to clients in China. It provides direct access to China’s high net worth population. With approximately 1,100 relationship managers in over 130 branch offices, its coverage network includes China’s regions where high net worth population is concentrated, including the Yangtze River Delta, the Pearl River Delta, the Bohai Rim and other regions. Its product offerings consist primarily of over-the-counter (OTC) wealth management and OTC asset management products, mutual fund products and asset management plans originated in China and designed to cater to the needs of China’s high net worth population.

About Northern Trust Corporation

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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