3. Northern Trust
Shares of Northern Trust (NTRS) of Chicago closed at $48.64 Monday, returning 25% year-to-date, following last year's 27% decline.
The shares trade for 1.8 times tangible book value, and for 14.5 times the consensus 2013 EPS estimate of $3.35. The consensus 2012 EPS estimate is $2.94.
Based on a quarterly payout of 30 cents, the shares have a dividend yield of 2.47%.
Northern Trust reported second-quarter net income of $179.6 million, or 73 cents a share, increasing from $161.2 million, or 66 cents a share in the first quarter, and $152 million, or 62 cents a share, during the second quarter of 2011.The company's second-quarter ROA was 0.78%, increasing from 0.68% the previous quarter, and 0.66% a year earlier. The return on average equity was 9.91% during the second quarter, increasing from 9.04% in the first quarter, and 8.76% in the second quarter of 2011. Northern Trust's second-quarter net interest income accounted for 26% of total revenue. The second-quarter net interest margin was 1.28%, increasing from 1.24% the previous quarter, and 1.23% a year earlier. Mosby estimates that Northern Trust's net interest margin will decline by eight basis points through the end of 2013. Mosby rates Northern Trust a "Buy," and on Monday raised his price target for the shares by two dollars to $59, "due to the recent acceleration in efficiency gains." The analyst said that "NTRS has one of the strongest capital positions in our coverage, high long-term returns on capital, and a proven risk avoidance strategy," which has "historically created a good, low-risk long-term investment." The analyst went on to say that "NTRS has over $20 billion in short-term investments, which could be deployed to earn at least 2% more in yield, or add roughly $1 in annualized earnings per share power," although "like the other trust banks, NTRS is exposed to changes in market valuations and revenue margins, which would be significantly unfavorably impacted by a near-term recession." NTRS data by YCharts
Interested in more on Northern Trust? See TheStreet Ratings' report card for this stock.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV