The Bank of New York Mellon (NYSE:BK) and Golub Capital BDC (NASDAQ:GBDC) are both finance companies, but which is the superior investment? We will contrast the two companies based on the strength of their analyst recommendations, institutional ownership, valuation, earnings, risk, profitability and dividends.
Institutional and Insider Ownership
82.3% of The Bank of New York Mellon shares are owned by institutional investors. Comparatively, 36.9% of Golub Capital BDC shares are owned by institutional investors. 0.1% of The Bank of New York Mellon shares are owned by company insiders. Comparatively, 6.9% of Golub Capital BDC shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.
Volatility & Risk
The Bank of New York Mellon has a beta of 1.07, suggesting that its share price is 7% more volatile than the S&P 500. Comparatively, Golub Capital BDC has a beta of 0.69, suggesting that its share price is 31% less volatile than the S&P 500.
Profitability
This table compares The Bank of New York Mellon and Golub Capital BDC'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% |
| Golub Capital BDC | 18.35% | 7.95% | 3.99% |
Dividends
The Bank of New York Mellon pays an annual dividend of $1.24 per share and has a dividend yield of 2.8%. Golub Capital BDC pays an annual dividend of $1.16 per share and has a dividend yield of 7.6%. The Bank of New York Mellon pays out 30.8% of its earnings in the form of a dividend. Golub Capital BDC pays out 95.1% 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 has increased its dividend for 1 consecutive years and Golub Capital BDC has increased its dividend for 1 consecutive years.
Valuation and Earnings
This table compares The Bank of New York Mellon and Golub Capital BDC's top-line revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio |
|---|
| The Bank of New York Mellon | $20.77 billion | 1.87 | $4.44 billion | $4.02 | 10.89 |
| Golub Capital BDC | $298.95 million | 8.55 | $54.87 million | $1.22 | 12.53 |
The Bank of New York Mellon has higher revenue and earnings than Golub Capital BDC. The Bank of New York Mellon is trading at a lower price-to-earnings ratio than Golub Capital BDC, indicating that it is currently the more affordable of the two stocks.
Analyst Recommendations
This is a summary of current recommendations for The Bank of New York Mellon and Golub Capital BDC, as reported 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 |
| Golub Capital BDC | 0 | 2 | 1 | 0 | 2.33 |
The Bank of New York Mellon currently has a consensus price target of $47.6176, indicating a potential upside of 8.12%. Golub Capital BDC has a consensus price target of $11.75, indicating a potential downside of 23.25%. Given The Bank of New York Mellon's stronger consensus rating and higher possible upside, analysts plainly believe The Bank of New York Mellon is more favorable than Golub Capital BDC.
Summary
The Bank of New York Mellon beats Golub Capital BDC on 11 of the 16 factors compared between the two stocks.
