Moelis & Company (NYSE:MC) versus Northern Trust (NASDAQ:NTRS) Financial Contrast

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

Volatility and Risk

Northern Trust has a beta of 1.21, indicating that its stock price is 21% more volatile than the S&P 500. Comparatively, Moelis & Company has a beta of 1.87, indicating that its stock price is 87% more volatile than the S&P 500.

Valuation and Earnings

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Northern Trust	$14.30 billion	2.25	$1.74 billion	$12.76	13.95
Moelis & Company	$1.52 billion	3.16	$233.04 million	$2.87	21.34

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.

Profitability

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

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

Analyst Ratings

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

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

Northern Trust presently has a consensus target price of $181.03, suggesting a potential upside of 1.69%. Moelis & Company has a consensus target price of $68.83, suggesting a potential upside of 12.41%. Given Moelis & Company’s stronger consensus rating and higher probable upside, analysts clearly believe Moelis & Company is more favorable than Northern Trust.

Dividends

Northern Trust pays an annual dividend of $3.52 per share and has a dividend yield of 2.0%. Moelis & Company pays an annual dividend of $2.60 per share and has a dividend yield of 4.2%. Northern Trust pays out 27.6% of its earnings in the form of a dividend. 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. Moelis & Company has increased 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.

Institutional and Insider Ownership

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

Summary

Moelis & Company beats Northern Trust on 11 of the 16 factors compared between the two stocks.

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.

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.