PennantPark Investment (NASDAQ:PNNT) and The Bank of New York Mellon (NYSE:BK) are both finance companies, but which is the better business? We will contrast the two businesses based on the strength of their analyst recommendations, earnings, dividends, valuation, institutional ownership, profitability and risk.
Analyst Ratings
This is a summary of current ratings for PennantPark Investment and The Bank of New York Mellon, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score |
|---|
| PennantPark Investment | 0 | 1 | 3 | 0 | 2.75 |
| The Bank of New York Mellon | 0 | 7 | 10 | 0 | 2.59 |
PennantPark Investment currently has a consensus price target of $5.00, indicating a potential downside of 23.31%. The Bank of New York Mellon has a consensus price target of $49.40, indicating a potential upside of 2.90%. Given The Bank of New York Mellon's higher probable upside, analysts plainly believe The Bank of New York Mellon is more favorable than PennantPark Investment.
Risk and Volatility
PennantPark Investment has a beta of 1.98, meaning that its share price is 98% more volatile than the S&P 500. Comparatively, The Bank of New York Mellon has a beta of 1.07, meaning that its share price is 7% more volatile than the S&P 500.
Dividends
PennantPark Investment pays an annual dividend of $0.48 per share and has a dividend yield of 7.4%. The Bank of New York Mellon pays an annual dividend of $1.24 per share and has a dividend yield of 2.6%. PennantPark Investment pays out 78.7% 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. PennantPark Investment has increased its dividend for 1 consecutive years and The Bank of New York Mellon has increased its dividend for 1 consecutive years.
Institutional & Insider Ownership
29.9% of PennantPark Investment shares are owned by institutional investors. Comparatively, 82.3% of The Bank of New York Mellon shares are owned by institutional investors. 3.0% of PennantPark Investment shares are owned by insiders. Comparatively, 0.1% of The Bank of New York Mellon shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.
Profitability
This table compares PennantPark 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 |
|---|
| PennantPark Investment | -15.93% | 7.56% | 3.07% |
| The Bank of New York Mellon | 23.09% | 9.89% | 0.89% |
Valuation & Earnings
This table compares PennantPark Investment and The Bank of New York Mellon's revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio |
|---|
| PennantPark Investment | $100.22 million | 4.36 | $-15,970,000.00 | $0.61 | 10.69 |
| The Bank of New York Mellon | $20.77 billion | 2.03 | $4.44 billion | $4.02 | 11.94 |
The Bank of New York Mellon has higher revenue and earnings than PennantPark Investment. PennantPark 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.
Summary
The Bank of New York Mellon beats PennantPark Investment on 10 of the 16 factors compared between the two stocks.
