BlackRock (NYSE: BLK) and Northern Trust Corporation (NASDAQ:NTRS) are both large-cap finance companies, but which is the better stock? We will contrast the two businesses based on the strength of their analyst recommendations, valuation, earnings, risk, dividends, institutional ownership and profitability.

Profitability

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

Net Margins Return on Equity Return on Assets
BlackRock 29.52% 12.09% 1.59%
Northern Trust Corporation 20.21% 12.08% 0.88%

Volatility and Risk

BlackRock has a beta of 1.72, meaning that its stock price is 72% more volatile than the S&P 500. Comparatively, Northern Trust Corporation has a beta of 0.93, meaning that its stock price is 7% less volatile than the S&P 500.

Valuation & Earnings

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

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
BlackRock $11.91 billion 6.45 $5.25 billion $21.36 22.26
Northern Trust Corporation $5.09 billion 4.17 $1.01 billion $4.40 21.13

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

Dividends

BlackRock pays an annual dividend of $10.00 per share and has a dividend yield of 2.1%. Northern Trust Corporation pays an annual dividend of $1.68 per share and has a dividend yield of 1.8%. BlackRock pays out 46.8% of its earnings in the form of a dividend. Northern Trust Corporation pays out 38.2% 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 Corporation has increased its dividend for 7 consecutive years.

Analyst Ratings

This is a breakdown of recent ratings for BlackRock and Northern Trust Corporation, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
BlackRock 0 3 9 0 2.75
Northern Trust Corporation 1 7 3 1 2.33

BlackRock presently has a consensus price target of $480.67, suggesting a potential upside of 1.09%. Northern Trust Corporation has a consensus price target of $94.42, suggesting a potential upside of 1.53%. Given Northern Trust Corporation’s higher probable upside, analysts clearly believe Northern Trust Corporation is more favorable than BlackRock.

Institutional and Insider Ownership

82.5% of BlackRock shares are held by institutional investors. Comparatively, 81.9% of Northern Trust Corporation shares are held by institutional investors. 1.9% of BlackRock shares are held by company insiders. Comparatively, 1.3% of Northern Trust Corporation shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Summary

BlackRock beats Northern Trust Corporation on 14 of the 18 factors compared between the two stocks.

BlackRock Company Profile

BlackRock, Inc. (BlackRock) is an investment management company. BlackRock provides a range of investment and risk management services to institutional and retail clients worldwide. Its diverse platform of active (alpha) and index (beta) investment strategies across asset classes enables the Company to tailor investment outcomes and asset allocation solutions for clients. Its product offerings include single- and multi-asset portfolios investing in equities, fixed income, alternatives and money market instruments. Its products are offered directly and through intermediaries in a range of vehicles, including open-end and closed-end mutual funds, iShares exchange-traded funds (ETFs), separate accounts, collective investment funds and other pooled investment vehicles. It offers its Aladdin investment system, as well as risk management, outsourcing, advisory and technology services, to institutional investors and wealth management intermediaries under the BlackRock Solutions name.

Northern Trust Corporation Company Profile

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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