Contrasting First Financial Northwest (NASDAQ:FFNW) and Northern Trust (NASDAQ:NTRS)

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

Valuation & Earnings

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
First Financial Northwest	$38.37 million	5.05	$6.30 million	$0.11	190.73
Northern Trust	$7.88 billion	2.67	$1.11 billion	$8.04	13.20

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

Analyst Recommendations

This is a breakdown of recent recommendations for First Financial Northwest and Northern Trust, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
First Financial Northwest	0	2	0	0	2.00
Northern Trust	1	8	3	0	2.17

First Financial Northwest presently has a consensus price target of $23.50, suggesting a potential upside of 12.01%. Northern Trust has a consensus price target of $107.17, suggesting a potential upside of 0.99%. Given First Financial Northwest’s higher possible upside, equities analysts clearly believe First Financial Northwest is more favorable than Northern Trust.

Risk and Volatility

First Financial Northwest has a beta of 0.53, indicating that its share price is 47% less volatile than the S&P 500. Comparatively, Northern Trust has a beta of 1.08, indicating that its share price is 8% more volatile than the S&P 500.

Dividends

First Financial Northwest pays an annual dividend of $0.26 per share and has a dividend yield of 1.2%. Northern Trust pays an annual dividend of $3.00 per share and has a dividend yield of 2.8%. First Financial Northwest pays out 236.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Northern Trust pays out 37.3% of its earnings in the form of a dividend. Northern Trust is clearly the better dividend stock, given its higher yield and lower payout ratio.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
First Financial Northwest	1.31%	0.66%	0.07%
Northern Trust	10.92%	12.75%	0.94%

Institutional & Insider Ownership

55.0% of First Financial Northwest shares are held by institutional investors. Comparatively, 83.2% of Northern Trust shares are held by institutional investors. 7.2% of First Financial Northwest shares are held by insiders. Comparatively, 0.6% of Northern Trust shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Summary

Northern Trust beats First Financial Northwest on 12 of the 16 factors compared between the two stocks.

About First Financial Northwest

First Financial Northwest, Inc. operates as the bank holding company for First Financial Northwest Bank that provides commercial banking services in Washington. The company offers a range of deposit products, including noninterest-bearing accounts, interest-bearing demand accounts, money market accounts, savings accounts, and certificates of deposit. Its loan products comprise one-to-four family residential loans; multifamily and commercial real estate loans; construction/land loans; business loans; and consumer loans, such as home equity loans, lines of credit, second mortgage term loans, auto loans, and savings account loans. The company also provides wealth management services; and online banking services, as well as debit cards and ATMs. The company was founded in 1923 and is headquartered in Renton, Washington.

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.