Critical Contrast: Richmond Mutual Bancorporation (NASDAQ:RMBI) and Northern Trust (NASDAQ:NTRS)

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

Dividends

Northern Trust pays an annual dividend of $3.00 per share and has a dividend yield of 2.9%. Richmond Mutual Bancorporation pays an annual dividend of $0.56 per share and has a dividend yield of 4.3%. Northern Trust pays out 37.3% of its earnings in the form of a dividend. Richmond Mutual Bancorporation pays out 65.1% 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.

Profitability

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

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

Institutional and Insider Ownership

83.2% of Northern Trust shares are held by institutional investors. Comparatively, 26.5% of Richmond Mutual Bancorporation shares are held by institutional investors. 0.6% of Northern Trust shares are held by insiders. Comparatively, 8.2% of Richmond Mutual Bancorporation shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Valuation and Earnings

This table compares Northern Trust and Richmond Mutual Bancorporation”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	1.72	$1.11 billion	$8.04	13.08
Richmond Mutual Bancorporation	$72.02 million	1.98	$9.49 million	$0.86	15.12

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.

Analyst Recommendations

This is a breakdown of recent ratings for Northern Trust and Richmond Mutual Bancorporation, as provided by MarketBeat.

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

Northern Trust presently has a consensus price target of $99.33, suggesting a potential downside of 5.56%. Given Northern Trust’s stronger consensus rating and higher probable upside, research analysts clearly believe Northern Trust is more favorable than Richmond Mutual Bancorporation.

Risk & Volatility

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

Summary

Northern Trust beats Richmond Mutual Bancorporation on 12 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 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.