Analyzing Northern Trust (NASDAQ:NTRS) & Moelis & Company (NYSE:MC)

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Moelis & Company	14.50%	39.59%	17.04%
Northern Trust	15.86%	17.97%	1.27%

Institutional & Insider Ownership

91.5% of Moelis & Company shares are owned by institutional investors. Comparatively, 83.2% of Northern Trust shares are owned by institutional investors. 6.3% of Moelis & Company shares are owned by insiders. Comparatively, 0.7% of Northern Trust shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Dividends

Moelis & Company pays an annual dividend of $2.60 per share and has a dividend yield of 4.4%. Northern Trust pays an annual dividend of $3.52 per share and has a dividend yield of 2.1%. Moelis & Company pays out 90.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Northern Trust pays out 27.6% of its earnings in the form of a dividend. Moelis & Company has raised its dividend for 1 consecutive years. Moelis & Company is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Recommendations

This is a summary of recent recommendations and price targets for Moelis & Company and Northern Trust, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Moelis & Company	0	6	2	0	2.25
Northern Trust	2	11	2	0	2.00

Moelis & Company currently has a consensus price target of $68.83, suggesting a potential upside of 17.36%. Northern Trust has a consensus price target of $181.03, suggesting a potential upside of 7.02%. Given Moelis & Company’s stronger consensus rating and higher possible upside, equities research analysts plainly believe Moelis & Company is more favorable than Northern Trust.

Valuation & Earnings

This table compares Moelis & Company and Northern Trust”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Moelis & Company	$1.57 billion	2.92	$233.04 million	$2.87	20.44
Northern Trust	$9.32 billion	3.32	$1.74 billion	$12.76	13.26

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

Volatility & Risk

Moelis & Company has a beta of 1.91, suggesting that its stock price is 91% more volatile than the S&P 500. Comparatively, Northern Trust has a beta of 1.24, suggesting that its stock price is 24% more volatile than the S&P 500.

Summary

Moelis & Company beats Northern Trust on 10 of the 16 factors compared between the two stocks.

About Moelis & Company

Moelis & Co. operates as a holding company. It engages in the provision of financial advisory, capital raising and asset management services to a client base including corporations, governments, sovereign wealth funds and financial sponsors. The firm focuses on clients including large public multinational corporations, middle market private companies, financial sponsors, entrepreneurs and governments. The company was founded by Kenneth David Moelis, Navid Mahmoodzadegan, Jeffrey Raich and Elizabeth Ann Crain in July 2007 and is headquartered in New York, NY.

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.