Northern Trust Corporation (NASDAQ: NTRS) and Noah Holdings (NYSE:NOAH) are both finance companies, but which is the better stock? We will compare the two companies based on the strength of their valuation, earnings, analyst recommendations, institutional ownership, dividends, risk and profitability.

Risk and Volatility

Northern Trust Corporation has a beta of 0.92, meaning that its share price is 8% less volatile than the S&P 500. Comparatively, Noah Holdings has a beta of 2.33, meaning that its share price is 133% more volatile than the S&P 500.

Dividends

Northern Trust Corporation pays an annual dividend of $1.52 per share and has a dividend yield of 1.7%. Noah Holdings does not pay a dividend. Northern Trust Corporation pays out 34.5% of its earnings in the form of a dividend.

Valuation and Earnings

This table compares Northern Trust Corporation and Noah Holdings’ gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Northern Trust Corporation $5.09 billion 3.91 $1.01 billion $4.40 19.81
Noah Holdings $390.11 million 3.10 $113.90 million $1.67 18.35

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

Analyst Ratings

This is a summary of current ratings and price targets for Northern Trust Corporation and Noah Holdings, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Northern Trust Corporation 1 6 3 1 2.36
Noah Holdings 0 0 1 0 3.00

Northern Trust Corporation currently has a consensus target price of $94.64, suggesting a potential upside of 8.59%. Noah Holdings has a consensus target price of $29.00, suggesting a potential downside of 5.38%. Given Northern Trust Corporation’s higher probable upside, analysts clearly believe Northern Trust Corporation is more favorable than Noah Holdings.

Institutional and Insider Ownership

83.5% of Northern Trust Corporation shares are owned by institutional investors. Comparatively, 42.7% of Noah Holdings shares are owned by institutional investors. 1.3% of Northern Trust Corporation shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Profitability

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

Net Margins Return on Equity Return on Assets
Northern Trust Corporation 20.21% 12.08% 0.88%
Noah Holdings 29.01% 19.37% 12.16%

Summary

Northern Trust Corporation beats Noah Holdings on 11 of the 17 factors compared between the two stocks.

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.

Noah Holdings Company Profile

Noah Holdings Limited is a wealth management service provider with a focus on global wealth investment and asset allocation services for high net worth individuals and enterprises in China. The Company operates through three segments: wealth management, asset management and Internet finance. It also provides Internet finance services to clients in China. It provides direct access to China’s high net worth population. With approximately 1,100 relationship managers in over 130 branch offices, its coverage network includes China’s regions where high net worth population is concentrated, including the Yangtze River Delta, the Pearl River Delta, the Bohai Rim and other regions. Its product offerings consist primarily of over-the-counter (OTC) wealth management and OTC asset management products, mutual fund products and asset management plans originated in China and designed to cater to the needs of China’s high net worth population.

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