Head to Head Review: Northern Trust (NASDAQ:NTRS) and Richmond Mutual Bancorporation (NASDAQ:RMBI)

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Richmond Mutual Bancorporation	10.62%	6.66%	0.60%
Northern Trust	10.92%	12.75%	0.94%

Dividends

Richmond Mutual Bancorporation pays an annual dividend of $0.56 per share and has a dividend yield of 4.3%. Northern Trust pays an annual dividend of $3.00 per share and has a dividend yield of 2.8%. Richmond Mutual Bancorporation pays out 65.1% of its earnings in the form of a dividend. Northern Trust pays out 37.3% 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.

Analyst Recommendations

This is a summary of current ratings for Richmond Mutual Bancorporation and Northern Trust, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Richmond Mutual Bancorporation	0	0	0	0	0.00
Northern Trust	3	6	3	0	2.00

Northern Trust has a consensus target price of $99.33, suggesting a potential downside of 6.79%. Given Northern Trust’s stronger consensus rating and higher probable upside, analysts plainly believe Northern Trust is more favorable than Richmond Mutual Bancorporation.

Risk and Volatility

Richmond Mutual Bancorporation has a beta of 0.64, indicating that its share price is 36% less volatile than the S&P 500. Comparatively, Northern Trust has a beta of 1.06, indicating that its share price is 6% more volatile than the S&P 500.

Insider and Institutional Ownership

26.5% of Richmond Mutual Bancorporation shares are owned by institutional investors. Comparatively, 83.2% of Northern Trust shares are owned by institutional investors. 8.2% of Richmond Mutual Bancorporation shares are owned by insiders. Comparatively, 0.6% of Northern Trust shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Valuation and Earnings

This table compares Richmond Mutual Bancorporation and Northern Trust”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Richmond Mutual Bancorporation	$72.02 million	1.98	$9.49 million	$0.86	15.06
Northern Trust	$12.12 billion	1.74	$1.11 billion	$8.04	13.25

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

Summary

Northern Trust beats Richmond Mutual Bancorporation on 12 of the 16 factors compared between the two stocks.

About Richmond Mutual Bancorporation

Richmond Mutual Bancorporation, Inc. operates as the bank holding company for First Bank Richmond that provides various banking services. It accepts various deposits, including savings deposit accounts, money market accounts, NOW and demand accounts, and certificates of deposit. The company also offers a range of lending products, such as multi-family and commercial real estate loans, commercial and industrial loans, construction and development loans, residential real estate loans, and consumer loans. In addition, it engages in the lease financing business; and provision of fee-based financial services comprising trust and estate administration, investment management, retirement plan administration, and private banking services. The company was founded in 1887 and is headquartered in Richmond, Indiana.

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.