The Bank of New York Mellon (NYSE:BK) and Citizens Financial Group (NYSE:CFG) are both large-cap finance companies, but which is the better stock? We will contrast the two companies based on the strength of their analyst recommendations, institutional ownership, valuation, profitability, risk, earnings and dividends.
Dividends
The Bank of New York Mellon pays an annual dividend of $1.24 per share and has a dividend yield of 2.6%. Citizens Financial Group pays an annual dividend of $1.56 per share and has a dividend yield of 3.4%. The Bank of New York Mellon pays out 30.8% of its earnings in the form of a dividend. Citizens Financial Group pays out 40.6% 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 increased its dividend for 1 consecutive years and Citizens Financial Group has increased its dividend for 1 consecutive years.
Volatility and Risk
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. Comparatively, Citizens Financial Group has a beta of 1.87, meaning that its share price is 87% more volatile than the S&P 500.
Earnings & Valuation
This table compares The Bank of New York Mellon and Citizens Financial Group'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 | 2.05 | $4.44 billion | $4.02 | 12.09 |
| Citizens Financial Group | $8.07 billion | 2.39 | $1.79 billion | $3.84 | 11.82 |
The Bank of New York Mellon has higher revenue and earnings than Citizens Financial Group. Citizens Financial Group 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.
Analyst Recommendations
This is a breakdown of recent ratings and recommmendations for The Bank of New York Mellon and Citizens Financial Group, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score |
|---|
| The Bank of New York Mellon | 0 | 7 | 10 | 0 | 2.59 |
| Citizens Financial Group | 1 | 4 | 10 | 0 | 2.60 |
The Bank of New York Mellon currently has a consensus price target of $49.40, suggesting a potential upside of 1.60%. Citizens Financial Group has a consensus price target of $44.9643, suggesting a potential downside of 0.89%. Given The Bank of New York Mellon's higher possible upside, analysts clearly believe The Bank of New York Mellon is more favorable than Citizens Financial Group.
Profitability
This table compares The Bank of New York Mellon and Citizens Financial Group'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% |
| Citizens Financial Group | 13.04% | 5.30% | 0.62% |
Insider and Institutional Ownership
82.3% of The Bank of New York Mellon shares are owned by institutional investors. Comparatively, 92.8% of Citizens Financial Group shares are owned by institutional investors. 0.1% of The Bank of New York Mellon shares are owned by company insiders. Comparatively, 0.4% of Citizens Financial Group shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.
Summary
The Bank of New York Mellon beats Citizens Financial Group on 8 of the 15 factors compared between the two stocks.
