Northern Trust Corporation (NASDAQ:NTRS) is a financial services company that provides wealth management, asset servicing, asset management, and banking solutions. It competes with other financial institutions like State Street Corporation, Comerica Incorporated, M&T Bank Corporation, Zions Bancorporation, and Marsh & McLennan Companies. These companies are evaluated based on their Return on Invested Capital (ROIC) and Weighted Average Cost of Capital (WACC).
Northern Trust's ROIC is 0.81%, while its WACC is significantly higher at 29.70%. This results in a ROIC to WACC ratio of 0.02, indicating that the company is not generating returns that exceed its cost of capital. In comparison, State Street Corporation has a ROIC of 0.55% and a WACC of 17.07%, leading to a slightly better ROIC to WACC ratio of 0.03.
Comerica Incorporated shows a ROIC of 0.43% against a WACC of 14.71%, resulting in a ROIC to WACC ratio of 0.02. M&T Bank Corporation, with a ROIC of 0.95% and a WACC of 17.10%, achieves a ROIC to WACC ratio of 0.05. These figures suggest that both companies are more efficient in using their capital compared to Northern Trust.
Zions Bancorporation presents a ROIC of 7.30% and a WACC of 17.20%, achieving a ROIC to WACC ratio of 0.42. Marsh & McLennan Companies, Inc. stands out with a ROIC of 12.07% and a WACC of 7.66%, resulting in the highest ROIC to WACC ratio of 1.57. This indicates that Marsh & McLennan is the most efficient in capital utilization among the peers, generating returns well above its cost of capital.
