Northern Trust (NASDAQ:NTRS) and First Community (NASDAQ:FCCO) are both finance companies, but which is the superior investment? We will contrast the two companies based on the strength of their valuation, earnings, analyst recommendations, institutional ownership, risk, profitability and dividends.
Earnings and Valuation
This table compares Northern Trust and First Community’s top-line revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Northern Trust||$6.66 billion||3.41||$1.56 billion||$6.73||15.93|
|First Community||$50.37 million||3.02||$11.23 million||$1.45||14.16|
Northern Trust has higher revenue and earnings than First Community. First Community is trading at a lower price-to-earnings ratio than Northern Trust, indicating that it is currently the more affordable of the two stocks.
This is a summary of current recommendations and price targets for Northern Trust and First Community, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Northern Trust presently has a consensus target price of $103.91, suggesting a potential downside of 3.10%. First Community has a consensus target price of $20.50, suggesting a potential downside of 0.15%. Given First Community’s higher possible upside, analysts clearly believe First Community is more favorable than Northern Trust.
Risk & Volatility
Northern Trust has a beta of 1.22, meaning that its stock price is 22% more volatile than the S&P 500. Comparatively, First Community has a beta of 0.89, meaning that its stock price is 11% less volatile than the S&P 500.
Insider and Institutional Ownership
81.8% of Northern Trust shares are held by institutional investors. Comparatively, 50.2% of First Community shares are held by institutional investors. 1.2% of Northern Trust shares are held by insiders. Comparatively, 5.7% of First Community 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.
This table compares Northern Trust and First Community’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Northern Trust pays an annual dividend of $2.80 per share and has a dividend yield of 2.6%. First Community pays an annual dividend of $0.44 per share and has a dividend yield of 2.1%. Northern Trust pays out 41.6% of its earnings in the form of a dividend. First Community pays out 30.3% 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 beats First Community on 13 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 First Community
First Community Corporation operates as the bank holding company for First Community Bank which offers various commercial and retail banking products and services to small-to-medium sized businesses, professional concerns, and individuals. The company operates through four segments: Commercial and Retail Banking, Mortgage Banking, Investment Advisory and Non-Deposit, and Corporate. Its deposit products include demand deposit accounts, checking accounts, NOW accounts, and savings accounts, as well as other time deposits, such as daily money market accounts and longer-term certificates of deposit. The company's loan portfolio comprises commercial loans that consist of secured and unsecured loans for working capital, business expansion, and the purchase of equipment and machinery; consumer loans, including secured and unsecured loans for financing automobiles, home improvements, education, and personal investments; real estate construction and acquisition loans; and fixed and variable rate mortgage loans. It also provides other banking services, which include Internet banking, cash management services, safe deposit boxes, traveler's checks, direct deposit of payroll and social security checks, and automatic drafts for various accounts. In addition, the company offers non-deposit investment products and other investment brokerage services; VISA and MasterCard credit card services; financial and investment advisory services; and insurance services. It operates 20 full-service offices located in the Lexington County, Richland County, Newberry County, Kershaw County, Greenville County, Anderson County, Pickens County, and Aiken County, South Carolina; and Richmond County, Georgia. First Community Corporation was incorporated in 1994 and is headquartered in Lexington, South Carolina.
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