Gladstone Investment (NASDAQ:GAIN) and The Bank of New York Mellon (NYSE:BK) are both finance companies, but which is the superior investment? We will compare the two companies based on the strength of their earnings, risk, valuation, dividends, profitability, analyst recommendations and institutional ownership.
Analyst Recommendations
This is a breakdown of current ratings and price targets for Gladstone Investment and The Bank of New York Mellon, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score |
|---|
| Gladstone Investment | 0 | 2 | 0 | 0 | 2.00 |
| The Bank of New York Mellon | 1 | 8 | 10 | 0 | 2.47 |
Gladstone Investment presently has a consensus price target of $12.75, indicating a potential upside of 19.72%. The Bank of New York Mellon has a consensus price target of $47.7105, indicating a potential upside of 4.70%. Given Gladstone Investment's higher possible upside, research analysts plainly believe Gladstone Investment is more favorable than The Bank of New York Mellon.
Valuation and Earnings
This table compares Gladstone Investment and The Bank of New York Mellon's top-line revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio |
|---|
| Gladstone Investment | $61.92 million | 5.71 | $-7,230,000.00 | $0.90 | 11.83 |
| The Bank of New York Mellon | $20.77 billion | 1.94 | $4.44 billion | $4.02 | 11.34 |
The Bank of New York Mellon has higher revenue and earnings than Gladstone Investment. The Bank of New York Mellon is trading at a lower price-to-earnings ratio than Gladstone Investment, indicating that it is currently the more affordable of the two stocks.
Insider & Institutional Ownership
12.1% of Gladstone Investment shares are owned by institutional investors. Comparatively, 82.3% of The Bank of New York Mellon shares are owned by institutional investors. 2.6% of Gladstone Investment shares are owned by company insiders. Comparatively, 0.1% of The Bank of New York Mellon shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.
Dividends
Gladstone Investment pays an annual dividend of $0.84 per share and has a dividend yield of 7.9%. The Bank of New York Mellon pays an annual dividend of $1.24 per share and has a dividend yield of 2.7%. Gladstone Investment pays out 93.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. The Bank of New York Mellon pays out 30.8% of its earnings in the form of a dividend. Gladstone Investment has increased its dividend for 1 consecutive years. Gladstone Investment is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Profitability
This table compares Gladstone Investment and The Bank of New York Mellon's net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets |
|---|
| Gladstone Investment | -34.86% | 5.53% | 3.52% |
| The Bank of New York Mellon | 23.09% | 9.89% | 0.89% |
Risk and Volatility
Gladstone Investment has a beta of 1.44, meaning that its stock price is 44% more volatile than the S&P 500. Comparatively, The Bank of New York Mellon has a beta of 1.07, meaning that its stock price is 7% more volatile than the S&P 500.
Summary
The Bank of New York Mellon beats Gladstone Investment on 10 of the 17 factors compared between the two stocks.
