FMP
The Bank of N.T. Butterfield & Son Limited (NYSE:NTB) Financial Overview
Nov 6, 2024 12:00 PM - Tony Dante
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- NTB's ROIC is significantly higher than its WACC, indicating efficient capital utilization.
- PJT Partners Inc. stands out with an exceptionally high ROIC to WACC ratio, showcasing its efficiency in generating returns.
- National Bank Holdings Corporation's low ROIC to WACC ratio raises concerns about its ability to cover its cost of capital.
The Bank of N.T. Butterfield & Son Limited (NYSE:NTB) is a financial institution that provides a range of banking services, including personal and business banking, wealth management, and trust services. It operates primarily in Bermuda, the Cayman Islands, and the Channel Islands. NTB competes with other financial service providers like PJT Partners Inc., National Bank Holdings Corporation, FB Financial Corporation, Northrim BanCorp, Inc., and Employers Holdings, Inc.
NTB's Return on Invested Capital (ROIC) is 31.36%, while its Weighted Average Cost of Capital (WACC) is 9.42%. This results in a ROIC to WACC ratio of 3.33, indicating that NTB is generating returns well above its cost of capital. This is a positive indicator for investors, as it suggests that the company is using its capital efficiently to generate profits.
In comparison, PJT Partners Inc. has an impressive ROIC of 115.65% and a WACC of 6.82%, leading to a ROIC to WACC ratio of 16.97. This high ratio highlights PJT's exceptional efficiency in generating returns relative to its cost of capital, making it a standout among its peers.
On the other hand, National Bank Holdings Corporation has a ROIC of 2.60% and a WACC of 7.33%, resulting in a low ROIC to WACC ratio of 0.35. This suggests that NBHC is not effectively covering its cost of capital, which could be a concern for investors.
Employers Holdings, Inc. shows a strong ROIC to WACC ratio of 3.41, with a ROIC of 19.26% and a WACC of 5.65%. This indicates efficient capital utilization, similar to NTB, and suggests that EIG is also generating returns significantly above its cost of capital.
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