The Bank of New York Mellon (NYSE:BK) and BlackRock TCP Capital (NASDAQ:TCPC) are both finance companies, but which is the superior business? We will compare the two companies based on the strength of their analyst recommendations, profitability, institutional ownership, valuation, dividends, risk and earnings.
Analyst Recommendations
This is a summary of recent ratings and price targets for The Bank of New York Mellon and BlackRock TCP Capital, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score |
|---|
| The Bank of New York Mellon | 0 | 7 | 10 | 0 | 2.59 |
| BlackRock TCP Capital | 0 | 1 | 3 | 0 | 2.75 |
The Bank of New York Mellon currently has a consensus price target of $49.40, indicating a potential upside of 7.23%. BlackRock TCP Capital has a consensus price target of $13.00, indicating a potential downside of 10.96%. Given The Bank of New York Mellon's higher probable upside, research analysts clearly believe The Bank of New York Mellon is more favorable than BlackRock TCP Capital.
Institutional and Insider Ownership
82.3% of The Bank of New York Mellon shares are held by institutional investors. Comparatively, 29.0% of BlackRock TCP Capital shares are held by institutional investors. 0.1% of The Bank of New York Mellon shares are held by insiders. Comparatively, 0.7% of BlackRock TCP Capital shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.
Risk and Volatility
The Bank of New York Mellon has a beta of 1.07, indicating that its share price is 7% more volatile than the S&P 500. Comparatively, BlackRock TCP Capital has a beta of 1.65, indicating that its share price is 65% more volatile than the S&P 500.
Profitability
This table compares The Bank of New York Mellon and BlackRock TCP Capital'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% |
| BlackRock TCP Capital | 12.56% | 11.83% | 5.09% |
Dividends
The Bank of New York Mellon pays an annual dividend of $1.24 per share and has a dividend yield of 2.7%. BlackRock TCP Capital pays an annual dividend of $1.20 per share and has a dividend yield of 8.2%. The Bank of New York Mellon pays out 30.8% of its earnings in the form of a dividend. BlackRock TCP Capital pays out 74.5% 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. The Bank of New York Mellon has raised its dividend for 1 consecutive years.
Valuation and Earnings
This table compares The Bank of New York Mellon and BlackRock TCP Capital's top-line 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 | 1.95 | $4.44 billion | $4.02 | 11.46 |
| BlackRock TCP Capital | $195.17 million | 4.32 | $30.58 million | $1.61 | 9.07 |
The Bank of New York Mellon has higher revenue and earnings than BlackRock TCP Capital. BlackRock TCP Capital 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 BlackRock TCP Capital on 9 of the 17 factors compared between the two stocks.
