BlackRock (NYSE:BLK) and Bank of New York Mellon (NYSE:BK) are both large-cap finance companies, but which is the superior business? We will compare the two businesses based on the strength of their institutional ownership, analyst recommendations, dividends, profitability, valuation, risk and earnings.
Valuation & Earnings
This table compares BlackRock and Bank of New York Mellon's gross revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio |
|---|
| BlackRock | $14.54 billion | 5.88 | $4.48 billion | $28.48 | 19.46 |
| Bank of New York Mellon | $20.77 billion | 1.64 | $4.44 billion | $4.02 | 9.55 |
BlackRock has higher earnings, but lower revenue than Bank of New York Mellon. Bank of New York Mellon is trading at a lower price-to-earnings ratio than BlackRock, indicating that it is currently the more affordable of the two stocks.
Analyst Recommendations
This is a summary of current recommendations for BlackRock and Bank of New York Mellon, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score |
|---|
| BlackRock | 0 | 2 | 9 | 0 | 2.82 |
| Bank of New York Mellon | 1 | 8 | 9 | 0 | 2.44 |
BlackRock presently has a consensus price target of $559.5455, indicating a potential upside of 0.99%. Bank of New York Mellon has a consensus price target of $45.5313, indicating a potential upside of 18.63%. Given Bank of New York Mellon's higher possible upside, analysts clearly believe Bank of New York Mellon is more favorable than BlackRock.
Institutional & Insider Ownership
82.8% of BlackRock shares are held by institutional investors. Comparatively, 81.7% of Bank of New York Mellon shares are held by institutional investors. 1.4% of BlackRock shares are held by company insiders. Comparatively, 0.1% of Bank of New York Mellon shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.
Risk and Volatility
BlackRock has a beta of 1.27, meaning that its stock price is 27% more volatile than the S&P 500. Comparatively, Bank of New York Mellon has a beta of 1.1, meaning that its stock price is 10% more volatile than the S&P 500.
Profitability
This table compares BlackRock and Bank of New York Mellon's net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets |
|---|
| BlackRock | 28.38% | 13.62% | 2.77% |
| Bank of New York Mellon | 21.60% | 10.59% | 1.00% |
Dividends
BlackRock pays an annual dividend of $14.52 per share and has a dividend yield of 2.6%. Bank of New York Mellon pays an annual dividend of $1.24 per share and has a dividend yield of 3.2%. BlackRock pays out 51.0% of its earnings in the form of a dividend. Bank of New York Mellon pays out 30.8% 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. BlackRock has increased its dividend for 10 consecutive years and Bank of New York Mellon has increased its dividend for 7 consecutive years. Bank of New York Mellon is clearly the better dividend stock, given its higher yield and lower payout ratio.
Summary
BlackRock beats Bank of New York Mellon on 12 of the 16 factors compared between the two stocks.
