Head-To-Head Analysis: Northern Trust (NASDAQ:NTRS) & Norwood Financial (NASDAQ:NWFL)

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Northern Trust	7.59%	12.57%	0.91%
Norwood Financial	16.17%	9.64%	0.78%

Insider and Institutional Ownership

83.2% of Northern Trust shares are held by institutional investors. Comparatively, 28.1% of Norwood Financial shares are held by institutional investors. 0.6% of Northern Trust shares are held by insiders. Comparatively, 9.1% of Norwood Financial shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Analyst Ratings

This is a breakdown of recent ratings and target prices for Northern Trust and Norwood Financial, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Northern Trust	2	6	3	0	2.09
Norwood Financial	0	0	0	0	N/A

Northern Trust presently has a consensus target price of $84.92, suggesting a potential upside of 4.26%. Given Northern Trust’s higher probable upside, analysts plainly believe Northern Trust is more favorable than Norwood Financial.

Volatility & Risk

Northern Trust has a beta of 1.13, suggesting that its stock price is 13% more volatile than the S&P 500. Comparatively, Norwood Financial has a beta of 0.63, suggesting that its stock price is 37% less volatile than the S&P 500.

Dividends

Northern Trust pays an annual dividend of $3.00 per share and has a dividend yield of 3.7%. Norwood Financial pays an annual dividend of $1.20 per share and has a dividend yield of 4.9%. Northern Trust pays out 66.2% of its earnings in the form of a dividend. Norwood Financial pays out 58.0% 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. Norwood Financial has raised its dividend for 6 consecutive years. Norwood Financial is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Valuation and Earnings

This table compares Northern Trust and Norwood Financial’s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Northern Trust	$12.12 billion	1.37	$1.11 billion	$4.53	17.98
Norwood Financial	$103.66 million	1.90	$16.76 million	$2.07	11.73

Northern Trust has higher revenue and earnings than Norwood Financial. Norwood 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 Norwood Financial on 10 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 Norwood Financial

Norwood Financial Corp. operates as the bank holding company for Wayne Bank that provides various banking products and services. The company accepts a range of deposit products, including interest-bearing and non-interest-bearing transaction accounts, and statement savings and money market accounts, as well as certificate of deposits. It also provides commercial loans comprising lines of credit, revolving credit, term loans, mortgages, secured lending products, and letter of credit facilities; municipal finance lending; construction loans for commercial construction projects and single-family residences; land loans; construction financing; consumer loans; mortgage lending to finance principal residences and second home dwellings; and indirect dealer financing of new and used automobiles, boats, and recreational vehicles. In addition, the company offers investment securities services; personal and business credit services; trust and investment products; and cash management, direct deposit, remote deposit capture, mobile deposit capture, automated clearing house activity, real estate settlement, and Internet and mobile banking services. Further, it engages in the annuity and mutual fund sale, and discount brokerage activities, as well as insurance agency business. The company serves consumers, businesses, nonprofit organizations, and municipalities. It operates branches in Northeastern Pennsylvania; and in Delaware, Sullivan, Ontario, Otsego, and Yates Counties, New York, as well as automated teller machines. Norwood Financial Corp. was founded in 1870 and is headquartered in Honesdale, Pennsylvania.