Comparing Northern Trust (NASDAQ:NTRS) & TPG (NASDAQ:TPG)

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

Risk and Volatility

TPG has a beta of 1.49, suggesting that its share price is 49% more volatile than the S&P 500. Comparatively, Northern Trust has a beta of 1.24, suggesting that its share price is 24% more volatile than the S&P 500.

Valuation and Earnings

This table compares TPG and Northern Trust”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
TPG	$4.67 billion	3.68	$184.59 million	$0.66	67.68
Northern Trust	$14.30 billion	2.19	$1.74 billion	$11.65	14.71

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
TPG	4.67%	28.10%	8.03%
Northern Trust	14.76%	16.91%	1.18%

Analyst Ratings

This is a summary of recent ratings and price targets for TPG and Northern Trust, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
TPG	0	5	12	0	2.71
Northern Trust	2	9	4	0	2.13

TPG presently has a consensus target price of $61.87, suggesting a potential upside of 38.50%. Northern Trust has a consensus target price of $180.93, suggesting a potential upside of 5.56%. Given TPG’s stronger consensus rating and higher possible upside, research analysts plainly believe TPG is more favorable than Northern Trust.

Institutional and Insider Ownership

94.0% of TPG shares are held by institutional investors. Comparatively, 83.2% of Northern Trust shares are held by institutional investors. 61.4% of TPG shares are held by company insiders. Comparatively, 0.7% of Northern Trust shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Dividends

TPG pays an annual dividend of $2.36 per share and has a dividend yield of 5.3%. Northern Trust pays an annual dividend of $3.52 per share and has a dividend yield of 2.1%. TPG pays out 357.6% 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 30.2% of its earnings in the form of a dividend.

Summary

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

About TPG

TPG Inc. operates as an alternative asset manager in the United States and internationally. The company offers investment management services to TPG Funds, limited partners, and other vehicles. It also offers monitoring services to portfolio companies; advisory, debt and equity arrangement, and underwriting and placement services; and capital structuring and other advisory services to portfolio companies. In addition, the company invests in private equity funds, real estate funds, hedge funds, and credit funds. TPG Inc. was founded in 1992 and is based in Fort Worth, Texas. The company operates as a subsidiary of TPG GP A, LLC.

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.