Apollo Global Management (APO) versus Northern Trust (NTRS) Critical Comparison

Northern Trust (NASDAQ: NTRS) and Apollo Global Management (NYSE:APO) are both mid-cap finance companies, but which is the superior business? We will compare the two companies based on the strength of their earnings, valuation, dividends, profitability, institutional ownership, risk and analyst recommendations.

Dividends

Northern Trust pays an annual dividend of $1.68 per share and has a dividend yield of 1.6%. Apollo Global Management pays an annual dividend of $1.56 per share and has a dividend yield of 4.5%. Northern Trust pays out 37.2% of its earnings in the form of a dividend. Apollo Global Management pays out 51.3% 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.

Valuation and Earnings

This table compares Northern Trust and Apollo Global Management’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Northern Trust $5.14 billion 4.66 $1.03 billion $4.52 23.31
Apollo Global Management $1.97 billion 3.40 $402.85 million $3.04 11.38

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

Profitability

This table compares Northern Trust and Apollo Global Management’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Northern Trust 20.27% 12.33% 0.89%
Apollo Global Management 24.82% 64.11% 21.48%

Insider & Institutional Ownership

81.7% of Northern Trust shares are owned by institutional investors. Comparatively, 72.4% of Apollo Global Management shares are owned by institutional investors. 1.3% of Northern Trust shares are owned by company insiders. Comparatively, 4.1% of Apollo Global Management shares are owned by company 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.

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Northern Trust and Apollo Global Management, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Northern Trust 1 9 3 0 2.15
Apollo Global Management 0 3 8 0 2.73

Northern Trust currently has a consensus price target of $98.77, indicating a potential downside of 6.27%. Apollo Global Management has a consensus price target of $34.45, indicating a potential downside of 0.36%. Given Apollo Global Management’s stronger consensus rating and higher probable upside, analysts clearly believe Apollo Global Management is more favorable than Northern Trust.

Risk & Volatility

Northern Trust has a beta of 0.97, indicating that its stock price is 3% less volatile than the S&P 500. Comparatively, Apollo Global Management has a beta of 1.22, indicating that its stock price is 22% more volatile than the S&P 500.

Summary

Apollo Global Management beats Northern Trust on 9 of the 16 factors compared between the two stocks.

Northern Trust Company Profile

Northern Trust Corporation is a financial holding company. The Company provides asset servicing, fund administration, asset management, fiduciary and banking solutions for corporations, institutions, families and individuals across the world. Its segments include Corporate & Institutional Services (C&IS), Wealth Management, and Treasury and Other. The C&IS segment is a provider of asset servicing and related services to corporate and public retirement funds, foundations, endowments, fund managers, insurance companies, sovereign wealth funds and other institutional investors around the globe. The Wealth Management segment provides trust, investment management, custody and philanthropic services; financial consulting; guardianship and estate administration; family business consulting; family financial education; brokerage services, and private and business banking. It conducts its business through various subsidiaries.

Apollo Global Management Company Profile

Apollo Global Management, LLC (Apollo) is an alternative investment manager in private equity, credit and real estate. The Company raises, invests and manages funds on behalf of pension, endowment and sovereign wealth funds, as well as other institutional and individual investors. The Company’s segments include private equity, credit and real estate. The private equity segment invests in control equity and related debt instruments, convertible securities and distressed debt investments. The credit segment invests in non-control corporate and structured debt instruments, including performing, stressed and distressed investments across the capital structure. The real estate segment invests in real estate equity for the acquisition and recapitalization of real estate assets, portfolios, platforms and operating companies, and real estate debt, including first mortgage and mezzanine loans, preferred equity and commercial mortgage backed securities.

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