Itaú Unibanco (NYSE:ITUB) and The Bank of New York Mellon (NYSE:BK) are both large-cap finance companies, but which is the better stock? We will contrast the two companies based on the strength of their valuation, analyst recommendations, profitability, dividends, institutional ownership, risk and earnings.
Valuation and Earnings
This table compares Itaú Unibanco and The Bank of New York Mellon's top-line revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio |
---|
Itaú Unibanco | $46.91 billion | 0.98 | $6.87 billion | $0.71 | 6.65 |
The Bank of New York Mellon | $20.77 billion | 2.07 | $4.44 billion | $4.02 | 12.21 |
Itaú Unibanco has higher revenue and earnings than The Bank of New York Mellon. Itaú Unibanco 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.
Volatility & Risk
Itaú Unibanco has a beta of 0.94, meaning that its share price is 6% less 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.
Insider and Institutional Ownership
4.5% of Itaú Unibanco shares are owned by institutional investors. Comparatively, 82.3% of The Bank of New York Mellon shares are owned by institutional investors. 0.1% of The Bank of New York Mellon shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.
Dividends
Itaú Unibanco pays an annual dividend of $0.03 per share and has a dividend yield of 0.6%. The Bank of New York Mellon pays an annual dividend of $1.24 per share and has a dividend yield of 2.5%. Itaú Unibanco pays out 4.2% of its earnings in the form of a dividend. The 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. The Bank of New York Mellon has increased its dividend for 1 consecutive years. The Bank of New York Mellon is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Profitability
This table compares Itaú Unibanco 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 |
---|
Itaú Unibanco | 10.91% | 13.88% | 1.10% |
The Bank of New York Mellon | 23.09% | 9.89% | 0.89% |
Analyst Ratings
This is a summary of current ratings and recommmendations for Itaú Unibanco and The Bank of New York Mellon, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score |
---|
Itaú Unibanco | 0 | 2 | 0 | 0 | 2.00 |
The Bank of New York Mellon | 0 | 7 | 10 | 0 | 2.59 |
The Bank of New York Mellon has a consensus target price of $49.40, suggesting a potential upside of 0.63%. Given The Bank of New York Mellon's stronger consensus rating and higher probable upside, analysts plainly believe The Bank of New York Mellon is more favorable than Itaú Unibanco.
Summary
The Bank of New York Mellon beats Itaú Unibanco on 12 of the 17 factors compared between the two stocks.