Northern Trust (NTRS) and Ameriprise Financial (AMP) Head to Head Analysis

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

Analyst Ratings

This is a breakdown of recent recommendations for Northern Trust and Ameriprise Financial, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Northern Trust 1 9 3 0 2.15
Ameriprise Financial 0 4 3 0 2.43

Northern Trust presently has a consensus target price of $98.77, indicating a potential downside of 7.25%. Ameriprise Financial has a consensus target price of $156.69, indicating a potential downside of 12.37%. Given Northern Trust’s higher possible upside, equities analysts plainly believe Northern Trust is more favorable than Ameriprise Financial.

Profitability

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

Net Margins Return on Equity Return on Assets
Northern Trust 20.27% 12.33% 0.89%
Ameriprise Financial 14.24% 29.75% 1.31%

Dividends

Northern Trust pays an annual dividend of $1.68 per share and has a dividend yield of 1.6%. Ameriprise Financial pays an annual dividend of $3.32 per share and has a dividend yield of 1.9%. Northern Trust pays out 37.2% of its earnings in the form of a dividend. Ameriprise Financial pays out 31.0% 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. Ameriprise Financial has increased its dividend for 8 consecutive years. Ameriprise Financial is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Risk & Volatility

Northern Trust has a beta of 0.97, suggesting that its share price is 3% less volatile than the S&P 500. Comparatively, Ameriprise Financial has a beta of 1.93, suggesting that its share price is 93% more volatile than the S&P 500.

Valuation and Earnings

This table compares Northern Trust and Ameriprise Financial’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Northern Trust $5.14 billion 4.71 $1.03 billion $4.52 23.56
Ameriprise Financial $11.70 billion 2.26 $1.31 billion $10.71 16.70

Ameriprise Financial has higher revenue and earnings than Northern Trust. Ameriprise 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.

Institutional & Insider Ownership

81.7% of Northern Trust shares are held by institutional investors. Comparatively, 81.6% of Ameriprise Financial shares are held by institutional investors. 1.3% of Northern Trust shares are held by insiders. Comparatively, 1.5% of Ameriprise Financial shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Summary

Ameriprise Financial beats Northern Trust on 11 of the 16 factors compared between the two stocks.

Northern Trust 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.

Ameriprise Financial Company Profile

Ameriprise Financial, Inc. is a financial services company that offers financial solutions to individual and institutional clients. The Company operates in five segments: Advice & Wealth Management; Asset Management; Annuities; Protection, and Corporate & Other. The Company uses Ameriprise Financial as its enterprise brand, as well as the name of its advisor network and certain of its retail products and services. The retail products and services that use the Ameriprise Financial brand include those that it provides through its advisors (financial planning, investment advisory accounts and retail brokerage services) and products and services that the Company markets directly to consumers or through affinity groups (personal auto and home insurance). The Company uses its RiverSource brand for its annuity and protection products issued by the RiverSource Life companies, including its life and disability income insurance products.

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