February 27, 2025
Top 10 Stock The Bank of N.T. Butterfield & Son Hold Recommendation
How to read the ranks
For every stock, we judge its performance against its peers and rank it on a scale of 1 to 100. The higher the rank, the better the stock performs than its peers. And, we do this for six investment strategies:
Value - shows how good of a value the stock is. Green is "inexpensive"; red is "expensive".
Growth - shows a company's growth potential. Green is "high growth" expected; red is "tough times ahead".
Safety - relates to the amount of debt a company has. Green is low debt level; red is high debt level.
Combined Financial - this isn't an average of the first three ranks but rather a consolidated view across several financial indicators. Green = good; red = tread carefully.
(NEW) Sentiment - quantifies professional analyst ratings and holdings as well as market pulse. Green = positive sentiment; red = skepticism (Only available to Premium Subscribers).
(NEW) 360° View - the ultimate rating with all financial and non-financial indicators.
Snapshot: The Bank of N.T. Butterfield & Son – Top 10 Stock in Independent Boards in Growth Markets
investors.butterfieldgroup.com
The Bank of N.T. Butterfield & Son is listed as a top 10 stock on February 27, 2025 in the market index Independent Boards Growth Markets because of its high performance in at least one of the Obermatt investment strategies. Two consolidated Obermatt Ranks are above-average. The company is safely financed and the professional investor sentiment is positive. Both are encouraging signals for a stock purchase decision, albeit at an above-average share price. Based on the Obermatt 360° View of 47 (47% performer), Obermatt assesses an overall hold recommendation for The Bank of N.T. Butterfield & Son on February 27, 2025.
Snapshot: Obermatt Ranks
| Country | Bermuda |
| Industry | Diversified Banks |
| Index | Independent Boards Growth Markets |
| Size class | Medium |
When Obermatt identifies the Top 10 stocks in a market, it’s based on a certain investment strategy. The best performing stocks usually aren’t the ones that everyone is talking about (those are often "over-priced" and have low Value ranks).
For each investment strategy, we provide you with more detailed analysis and our recommendation. You see the ranks of the top 10 stocks ranked by that particular investment strategy (360° View, Sentiment, Value, Growth, Safety and Combined Financial Performance).
360° View: Obermatt 360° View The Bank of N.T. Butterfield & Son Hold
| 360 METRICS | February 27, 2025 | |||||||
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| VALUE | ||||||||
| VALUE | 19 |
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| GROWTH | ||||||||
| GROWTH | 21 |
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| SAFETY | ||||||||
| SAFETY | 95 |
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| SENTIMENT | ||||||||
| SENTIMENT | 69 |
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| 360° VIEW | ||||||||
| 360° VIEW | 47 |
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ANALYSIS: With an Obermatt 360° View of 47 (better than 47% compared with alternatives), overall professional sentiment and financial characteristics for the stock The Bank of N.T. Butterfield & Son are below the industry average. The 360° View is based on consolidating four consolidated indicators, with half below and half above average for The Bank of N.T. Butterfield & Son. The consolidated Sentiment Rank has a good rank of 69, which means that professional investors are more optimistic about the stock than for 69% of alternative investment opportunities. It also rates well regarding its financing structure, with the consolidated Safety Rank at 95 or better than 95% of its peers when looking at the amount of its debt, its refinancing requirements, and its ability to service debt. But the stock is expensive and expects low growth. The consolidated Value Rank is only 19, meaning that the share price of The Bank of N.T. Butterfield & Son is on the high side, compared with indicators such as revenues, profits, and invested capital. The company exhibits below-average growth momentum when looking at financial metrics such as revenue, profit, invested capital growth,and stock returns, with its Growth Rank at 21. ...read more
RECOMMENDATION: With a consolidated 360° View of 47, The Bank of N.T. Butterfield & Son is worse than 53% of all alternative stock investment opportunities based on the Obermatt Method. As only half of the consolidated Obermatt Ranks exhibit excellent performance, namely the positive professional market sentiment (Sentiment Rank of 69) and safe financing practices (Safety Rank of 95), the case for investing in this stock needs further thought. The Value and the Safety Ranks are below average. The Safety Rank is the least critical of the four consolidated ranks, because it only reflects financing practices. So the question is: How to assess below-average value against above-average sentiment? This may be a case where growth is in the future, not yet reflected in current performance. Companies that might fall into this category are those with intellectual property, such as technology and pharmaceutical companies. In early phases, they are expensive relative to their size and have a lot of capital on their books, as is the case here. Investors expect a better future and are willing to pay a higher price than is warranted by the current company size. These higher prices drive stock price value down in the short term. In this case, future growth may be the strongest driver of the investment case, reflected by institutional investors' opinions. With a weak Value Rank, the question is how much to sacrifice value at the cost of positive sentiment. Sometimes market sentiment is just hype, but sometimes it is right. You pay more than market-average for this stock, but it may be worth it, if the future of The Bank of N.T. Butterfield & Soṇ is bright. Prudent investors may only want to invest a smaller portion of their wealth in such situations. Young investors can carry more risk but should still thrive for sufficient diversification. ...read more
Sentiment Strategy: Professional Market Sentiment for The Bank of N.T. Butterfield & Son positive
ANALYSIS: With an Obermatt Sentiment Rank of 69 (better than 69% compared with alternatives), overall professional sentiment and engagement for the stock The Bank of N.T. Butterfield & Son is above average. The Sentiment Rank is based on consolidating four sentiment indicators, with three out of four metrics below average for The Bank of N.T. Butterfield & Son. Analyst Opinions are at a rank of 41 (worse than 59% of alternative investments), which means that currently, stock research analysts tend to warn against investing in the stock of the company. But they are changing their opinions! Analyst Opinions Change has a rank of 97, which means that stock research experts have found something to make them more positive about investing in the company. In other words, they are getting more optimistic of stock investments in The Bank of N.T. Butterfield & Son. But the Professional Investors rank is low at 45, which means that professional investors hold less stock in this company than in 55% of alternative investment opportunities. Pros tend to invest in other companies. Market Pulse is also low at a rank of 45, which means that the current professional news and professional social networks tend to be negative when discussing this company (more negative news than for 55% of competitors). ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 69 (more positive than 69% compared with investment alternatives), The Bank of N.T. Butterfield & Son has a reputation among professional investors that is above-average compared with that of its competitors. These are quite a few negative sentiment signals. One may want to trust the analysts that are changing their opinions. They may be early indications of better times, especially if the company is a smaller one. But If they are an extra large company, they should have more professional stockholders than are currently present. ...read more
Value Strategy: The Bank of N.T. Butterfield & Son Stock Price Value low
ANALYSIS: With an Obermatt Value Rank of 19 (worse than 81% compared with alternatives), The Bank of N.T. Butterfield & Son shares are significantly more expensive than comparable stocks. The Value Rank is based on consolidating four value indicators, with all four indicators below average for The Bank of N.T. Butterfield & Son. Price-to-Sales is 25 which means that the stock price compared with what market professionals expect for future profits is higher than 75% of comparable companies, indicating a low value concerning The Bank of N.T. Butterfield & Son's sales levels. Price-to-Book Capital (also referred to as market-to-book ratio) also has a low Price-to-Book Rank of 19, which means that both reliable company size indicators, sales, and invested capital cannot explain the high stock price of The Bank of N.T. Butterfield & Son. In addition, the two profit-related value indicators, Price-to-Profit (also referred to as price-earnings, P/E) with a low rank of 30 and Dividend Yield, which is lower than 56% of comparable companies, also make the stock more expensive compared with investment alternatives. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 19, is a sell recommendation based on The Bank of N.T. Butterfield & Son's stock price compared with the company's operational size and dividend yields. How can market participants pay such a high price for The Bank of N.T. Butterfield & Son? One reason may be that the company is simply too popular. If enough people want a particular stock, its price can exceed reasonable levels. This is often the case for companies offering new and exciting products and everybody wants a piece of the action. Should you pay a lot for a hot stock such as The Bank of N.T. Butterfield & Son? It's risky, and even if the stock price continues to grow because of popular demand, it may return to more typical lower levels later. And that return can be sudden and quick, making it impossible for retail investors to exit on time. Sometimes, high prices are deserved. This is the case when it is justified to believe that the company will dominate a market with high profit margins. It has happened in the past for many technology companies and indeed for commercially successful pharmaceutical discoveries. Sometimes they last, sometimes, they get eaten alive. The Bank of N.T. Butterfield & Son may be such a type of stock. That would mean, retail investors should be careful, only considering investing a small part of their wealth in this exciting category and always being ready to lose more than half, if not all of the investment. ...read more
Growth Strategy: The Bank of N.T. Butterfield & Son Growth Momentum negative
ANALYSIS: With an Obermatt Growth Rank of 21 (better than 21% compared with alternatives), The Bank of N.T. Butterfield & Son shows one of the most restricted growth dynamics in its industry. There is little momentum in this company. The Growth Rank is based on consolidating four value indicators, with half of the indicators below and half above average for The Bank of N.T. Butterfield & Son. Capital Growth has a rank of 54, which means that currently professionals expect the company to grow its invested capital more than 6% of its competitors. Investors welcomed this, visible in the Stock Returns rank of 85 (above 85% of alternative investments). But Sales Growth has only a rank of 4, which means that, currently, professionals expect the company to grow less than 96% of its competitors, and Profit Growth is also low at a rank of 6. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 21, is a sell recommendation for growth and momentum investors. This is an ambiguous picture. Revenue growth and capital growth are strong, but the growth in profit, which seems good, can also be an indication that growth momentum may be negative. The fact that stock returns have been above average doesn't help much, as stock returns are less reliable in showing a company’s future growth potential. Prices may perform well for the simple reason that investors were too pessimistic in the past and are now correcting their opinions and moving the stock price to a more reasonable level. As the growth picture is mixed for The Bank of N.T. Butterfield & Son, investors may want to look at value and sentiment indicators for a well-rounded picture of this stock. ...read more
Safety Strategy: The Bank of N.T. Butterfield & Son Debt Financing Safety very solid
| SAFETY METRICS | February 27, 2025 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 96 |
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| REFINANCING | ||||||||
| REFINANCING | 53 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 63 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 95 |
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ANALYSIS: With an Obermatt Safety Rank of 95 (better than 95% compared with alternatives) for 2025, the company The Bank of N.T. Butterfield & Son has safe financing practices, which means that their overall debt burden is low. This doesn't mean that the business of The Bank of N.T. Butterfield & Son is safe, it only means that the company is on the safer side regarding possible bankruptcy, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, where all three are above average for The Bank of N.T. Butterfield & Son. Leverage is at 96, meaning the company has a below-average debt-to-equity ratio. It has less debt than 96% of its competitors. Refinancing is at a rank of 53, meaning that the portion of the debt about to be refinanced is below average. It has less debt in the refinancing stage than 53% of its competitors. Finally, Liquidity is also good at a rank of 63, which means that the company generates more profit to service its debt than 63% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 95 (better than 95% compared with alternatives), The Bank of N.T. Butterfield & Son has a financing structure that is significantly safer than that of its competitors. These three positive financing indicators signal that the company is less likely to default on its debt obligations. However, it also means that its shareholder returns will be more modest if things go well. A low safety means fewer troubles in downtimes and less upside in good times. ...read more
Combined financial peformance: The Bank of N.T. Butterfield & Son Below-Average Financial Performance
| COMBINED PERFORMANCE | February 27, 2025 | |||||||
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| VALUE | ||||||||
| VALUE | 19 |
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| GROWTH | ||||||||
| GROWTH | 21 |
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| SAFETY | ||||||||
| SAFETY | 63 |
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| COMBINED | ||||||||
| COMBINED | 29 |
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ANALYSIS: With an Obermatt Combined Rank of 29 (worse than 71% compared with investment alternatives), The Bank of N.T. Butterfield & Son (Diversified Banks, Bermuda) shares have somewhat below-average financial characteristics compared with similar stocks. Shares of The Bank of N.T. Butterfield & Son are low in value (priced high) with a consolidated Value Rank of 19 (worse than 81% of alternatives) and show below-average growth (Growth Rank of 21) but are safely financed (Safety Rank of 95), which means low debt burdens. ...read more
RECOMMENDATION: A Combined Rank of 29, is a hold recommendation based on The Bank of N.T. Butterfield & Son's financial characteristics. As the company The Bank of N.T. Butterfield & Son's critical financial metrics exhibit below-average performance, such as low value (Obermatt Value Rank of 19) and low growth (Obermatt Growth Rank of 21), it is a somewhat questionable stock investment, where the risk of paying too much for the shares is significant, unless the company has an exceptionally bright future. In this case, good financing practices (Obermatt Safety Rank of 95) are a positive sign, because it may allow the company to weather challenging times until the hoped-for cash flows materialize. This may be true for high-tech or biotechnology companies with enough cash to sustain prolonged business development. If they own properties that only provide cash flows in the future, the stock may look excessively expensive and unattractive today. In such cases, the Obermatt Method has limited value, as it is based on facts we can observe today. If the facts lie all in the future, stock investing becomes guesswork, and this should only be a driver in a limited number of investments that account for a small fraction of a safe portfolio. ...read more
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