Critical Contrast: Northern Trust Corporation (NTRS) vs. Brookfield Asset Management (BAM)
Brookfield Asset Management (NYSE: BAM) and Northern Trust Corporation (NASDAQ:NTRS) are both large-cap finance companies, but which is the superior investment? We will contrast the two businesses based on the strength of their valuation, dividends, risk, institutional ownership, analyst recommendations, earnings and profitabiliy.
Institutional and Insider Ownership
53.5% of Brookfield Asset Management shares are held by institutional investors. Comparatively, 82.8% of Northern Trust Corporation shares are held by institutional investors. 1.3% of Northern Trust Corporation shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.
This table compares Brookfield Asset Management and Northern Trust Corporation’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Brookfield Asset Management||5.39%||2.12%||0.85%|
|Northern Trust Corporation||20.20%||11.96%||0.87%|
Volatility & Risk
Brookfield Asset Management has a beta of 1.04, meaning that its share price is 4% more volatile than the S&P 500. Comparatively, Northern Trust Corporation has a beta of 0.97, meaning that its share price is 3% less volatile than the S&P 500.
This is a summary of recent recommendations and price targets for Brookfield Asset Management and Northern Trust Corporation, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Brookfield Asset Management||0||1||6||0||2.86|
|Northern Trust Corporation||0||5||3||1||2.56|
Brookfield Asset Management presently has a consensus price target of $41.57, indicating a potential upside of 7.31%. Northern Trust Corporation has a consensus price target of $91.11, indicating a potential downside of 3.08%. Given Brookfield Asset Management’s stronger consensus rating and higher probable upside, equities research analysts clearly believe Brookfield Asset Management is more favorable than Northern Trust Corporation.
Brookfield Asset Management pays an annual dividend of $0.56 per share and has a dividend yield of 1.4%. Northern Trust Corporation pays an annual dividend of $1.52 per share and has a dividend yield of 1.6%. Brookfield Asset Management pays out 44.8% of its earnings in the form of a dividend. Northern Trust Corporation pays out 34.8% 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. Brookfield Asset Management has raised its dividend for 5 consecutive years. Northern Trust Corporation is clearly the better dividend stock, given its higher yield and lower payout ratio.
Earnings & Valuation
This table compares Brookfield Asset Management 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|
|Brookfield Asset Management||$26.74 billion||1.39||$8.19 billion||$1.25||30.99|
|Northern Trust Corporation||$5.09 billion||4.24||$1.00 billion||$4.37||21.51|
Brookfield Asset Management has higher revenue and earnings than Northern Trust Corporation. Northern Trust Corporation is trading at a lower price-to-earnings ratio than Brookfield Asset Management, indicating that it is currently the more affordable of the two stocks.
Northern Trust Corporation beats Brookfield Asset Management on 10 of the 18 factors compared between the two stocks.
About Brookfield Asset Management
Brookfield Asset Management Inc. is an alternative asset manager. The Company operates in eight segments. The Asset Management segment manages its listed partnerships, private funds and public markets on behalf of its clients. The Property segment includes the ownership, operation and development of office, retail and other properties. The Renewable power segment operates and develops hydroelectric, wind power and other generating facilities. The Infrastructure segment includes the ownership, operation and development of utilities and agricultural operations, among others. The Residential development segment includes homebuilding, condominium development and land development. The Service activities segment includes construction management and contracting services and property services. The Private equity segment includes the investments and operations overseen by its private equity group. The Corporate activities segment includes the allocation of capital to its operating platforms.
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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