Northern Trust (NASDAQ:NTRS) and Lakeland Financial (NASDAQ:LKFN) Head-To-Head Review

Northern Trust (NASDAQ:NTRS) and Lakeland Financial (NASDAQ:LKFN) are both finance companies, but which is the better investment? We will compare the two companies based on the strength of their earnings, valuation, institutional ownership, risk, profitability, analyst recommendations and dividends.

Profitability

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

Net Margins Return on Equity Return on Assets
Northern Trust 22.10% 15.66% 1.22%
Lakeland Financial 33.08% 15.57% 1.75%

Insider & Institutional Ownership

81.9% of Northern Trust shares are owned by institutional investors. Comparatively, 76.4% of Lakeland Financial shares are owned by institutional investors. 1.2% of Northern Trust shares are owned by insiders. Comparatively, 4.6% of Lakeland Financial 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.

Dividends

Northern Trust pays an annual dividend of $2.80 per share and has a dividend yield of 2.6%. Lakeland Financial pays an annual dividend of $1.20 per share and has a dividend yield of 2.5%. Northern Trust pays out 41.6% of its earnings in the form of a dividend. Lakeland Financial pays out 38.3% 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. Northern Trust has increased its dividend for 7 consecutive years and Lakeland Financial has increased its dividend for 7 consecutive years.

Risk & Volatility

Northern Trust has a beta of 1.22, meaning that its share price is 22% more volatile than the S&P 500. Comparatively, Lakeland Financial has a beta of 0.96, meaning that its share price is 4% less volatile than the S&P 500.

Analyst Recommendations

This is a summary of current ratings and target prices for Northern Trust and Lakeland Financial, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Northern Trust 1 8 3 0 2.17
Lakeland Financial 0 1 0 0 2.00

Northern Trust presently has a consensus target price of $107.24, suggesting a potential downside of 0.70%. Given Northern Trust’s stronger consensus rating and higher possible upside, equities research analysts clearly believe Northern Trust is more favorable than Lakeland Financial.

Earnings and Valuation

This table compares Northern Trust and Lakeland Financial’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Northern Trust $6.66 billion 3.44 $1.56 billion $6.73 16.05
Lakeland Financial $239.08 million 5.23 $80.41 million $3.13 15.60

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

Summary

Northern Trust beats Lakeland Financial 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, Corporate & Institutional Services (C&IS) and Wealth Management. The C&IS 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; 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. The company was founded in 1889 and is headquartered in Chicago, Illinois.

About Lakeland Financial

Lakeland Financial Corporation operates as the bank holding company for Lake City Bank that provides various banking products and services. The company accepts various deposit products, such as noninterest bearing, interest-bearing checking, savings, money market, NOW, and demand deposits. Its loan products include commercial and industrial, commercial real estate and multi-family residential, agri-business and agricultural, consumer 1-4 family mortgage, and other consumer loans. The company also offers retail and merchant credit card services; corporate treasury management, wealth advisory, and trust services; retail brokerage services, including various financial and investment products, such as annuities and life insurance; and Internet business banking and online treasury management services. It serves commercial real estate, manufacturing, agriculture, construction, retail, wholesale, finance and insurance, accommodation and food services, and health care industries. As of January 25, 2019, the company operated 50 offices in Northern and Central Indiana. Lakeland Financial Corporation was founded in 1872 and is headquartered in Warsaw, Indiana.

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