Northern Trust (NASDAQ:NTRS) and Comerica (NYSE:CMA) Financial Comparison

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

Dividends

Comerica pays an annual dividend of $2.84 per share and has a dividend yield of 4.2%. Northern Trust pays an annual dividend of $3.00 per share and has a dividend yield of 2.3%. Comerica pays out 54.4% of its earnings in the form of a dividend. Northern Trust pays out 35.3% 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 Comerica and Northern Trust”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Comerica	$4.99 billion	1.78	$698.00 million	$5.22	12.94
Northern Trust	$16.06 billion	1.57	$2.03 billion	$8.51	15.28

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

Volatility & Risk

Comerica has a beta of 0.92, meaning that its share price is 8% less volatile than the S&P 500. Comparatively, Northern Trust has a beta of 1.26, meaning that its share price is 26% more volatile than the S&P 500.

Analyst Ratings

This is a summary of recent recommendations for Comerica and Northern Trust, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Comerica	6	10	5	0	1.95
Northern Trust	3	8	2	0	1.92

Comerica presently has a consensus target price of $63.25, suggesting a potential downside of 6.39%. Northern Trust has a consensus target price of $116.58, suggesting a potential downside of 10.32%. Given Comerica’s stronger consensus rating and higher possible upside, equities analysts clearly believe Comerica is more favorable than Northern Trust.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Comerica	14.92%	10.92%	0.92%
Northern Trust	11.75%	14.06%	1.04%

Insider and Institutional Ownership

80.7% of Comerica shares are owned by institutional investors. Comparatively, 83.2% of Northern Trust shares are owned by institutional investors. 0.2% of Comerica shares are owned by company insiders. Comparatively, 0.8% of Northern Trust shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Summary

Northern Trust beats Comerica on 10 of the 16 factors compared between the two stocks.

About Comerica

Comerica Incorporated, through its subsidiaries, provides various financial products and services. The company operates through Commercial Bank, Retail Bank, Wealth Management, and Finance segments. The Commercial Bank segment offers various products and services, including commercial loans and lines of credit, deposits, cash management, payment solutions, card services, capital market products, international trade finance, letters of credit, foreign exchange management services, and loan syndication services for small and middle market businesses, multinational corporations, and governmental entities. The Retail Bank segment provides personal financial services, such as consumer lending, consumer deposit gathering, and mortgage loan origination; and various consumer products that include deposit accounts, installment loans, credit cards, student loans, home equity lines of credit, and residential mortgage loans. The Wealth Management segment offers products and services comprising financial planning, trust and fiduciary services, investment management and advisory, brokerage, private banking, and business transition planning services for affluents, high-net worth and ultra-high-net-worth individuals and families, business owners, and executives, and institutional clients. The Finance segment comprises securities portfolio, and asset and liability management activities. It operates in Texas, California, Michigan, Arizona, and Florida, the United States; and Canada and Mexico. The company was formerly known as DETROITBANK Corporation and changed its name to Comerica Incorporated in July 1982. Comerica Incorporated was founded in 1849 and is headquartered in Dallas, Texas.

About Northern Trust

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, Asset Servicing and Wealth Management. The Asset Servicing 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; muti-asset and 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. Northern Trust Corporation was founded in 1889 and is headquartered in Chicago, Illinois.