The Bank of New York Mellon (NYSE:BK) and Apollo Investment (NASDAQ:AINV) are both finance companies, but which is the better stock? We will compare the two companies based on the strength of their valuation, earnings, institutional ownership, profitability, dividends, risk and analyst recommendations.
Analyst Ratings
This is a breakdown of current ratings and recommmendations for The Bank of New York Mellon and Apollo Investment, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score |
|---|
| The Bank of New York Mellon | 1 | 7 | 10 | 0 | 2.50 |
| Apollo Investment | 1 | 5 | 1 | 0 | 2.00 |
The Bank of New York Mellon presently has a consensus price target of $47.6176, indicating a potential upside of 15.30%. Apollo Investment has a consensus price target of $8.8333, indicating a potential downside of 28.18%. Given The Bank of New York Mellon's stronger consensus rating and higher probable upside, analysts plainly believe The Bank of New York Mellon is more favorable than Apollo Investment.
Institutional and Insider Ownership
82.3% of The Bank of New York Mellon shares are held by institutional investors. Comparatively, 34.5% of Apollo Investment shares are held by institutional investors. 0.1% of The Bank of New York Mellon shares are held by company insiders. Comparatively, 0.5% of Apollo Investment shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.
Valuation & Earnings
This table compares The Bank of New York Mellon and Apollo Investment's gross revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio |
|---|
| The Bank of New York Mellon | $20.77 billion | 1.76 | $4.44 billion | $4.02 | 10.27 |
| Apollo Investment | $276.92 million | 2.90 | $-116,060,000.00 | $2.16 | 5.69 |
The Bank of New York Mellon has higher revenue and earnings than Apollo Investment. Apollo Investment is trading at a lower price-to-earnings ratio than The Bank of New York Mellon, indicating that it is currently the more affordable of the two stocks.
Profitability
This table compares The Bank of New York Mellon and Apollo Investment's net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets |
|---|
| The Bank of New York Mellon | 23.09% | 9.89% | 0.89% |
| Apollo Investment | -43.98% | 12.35% | 4.60% |
Dividends
The Bank of New York Mellon pays an annual dividend of $1.24 per share and has a dividend yield of 3.0%. Apollo Investment pays an annual dividend of $1.24 per share and has a dividend yield of 10.1%. The Bank of New York Mellon pays out 30.8% of its earnings in the form of a dividend. Apollo Investment pays out 57.4% 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.
Volatility and Risk
The Bank of New York Mellon has a beta of 1.07, suggesting that its stock price is 7% more volatile than the S&P 500. Comparatively, Apollo Investment has a beta of 2, suggesting that its stock price is 100% more volatile than the S&P 500.
Summary
The Bank of New York Mellon beats Apollo Investment on 10 of the 16 factors compared between the two stocks.
