The Bank of New York Mellon (NYSE:BK) and Main Street Capital (NYSE:MAIN) are both finance companies, but which is the better investment? We will contrast the two businesses based on the strength of their earnings, profitability, dividends, risk, valuation, analyst recommendations and institutional ownership.
Institutional and Insider Ownership
82.3% of The Bank of New York Mellon shares are owned by institutional investors. Comparatively, 19.5% of Main Street Capital shares are owned by institutional investors. 0.1% of The Bank of New York Mellon shares are owned by insiders. Comparatively, 5.1% of Main Street Capital shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.
Earnings & Valuation
This table compares The Bank of New York Mellon and Main Street Capital's gross 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 | 1.97 | $4.44 billion | $4.02 | 11.58 |
Main Street Capital | $243.37 million | 11.93 | $129.57 million | $2.50 | 17.08 |
The Bank of New York Mellon has higher revenue and earnings than Main Street Capital. The Bank of New York Mellon is trading at a lower price-to-earnings ratio than Main Street Capital, indicating that it is currently the more affordable of the two stocks.
Profitability
This table compares The Bank of New York Mellon and Main Street Capital's net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets |
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The Bank of New York Mellon | 23.09% | 9.89% | 0.89% |
Main Street Capital | -15.34% | 9.71% | 5.30% |
Dividends
The Bank of New York Mellon pays an annual dividend of $1.24 per share and has a dividend yield of 2.7%. Main Street Capital pays an annual dividend of $2.46 per share and has a dividend yield of 5.8%. The Bank of New York Mellon pays out 30.8% of its earnings in the form of a dividend. Main Street Capital pays out 98.4% 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 has raised its dividend for 1 consecutive years and Main Street Capital has raised its dividend for 1 consecutive years.
Volatility & Risk
The Bank of New York Mellon has a beta of 1.07, suggesting that its share price is 7% more volatile than the S&P 500. Comparatively, Main Street Capital has a beta of 1.42, suggesting that its share price is 42% more volatile than the S&P 500.
Analyst Ratings
This is a summary of recent ratings and price targets for The Bank of New York Mellon and Main Street Capital, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score |
---|
The Bank of New York Mellon | 0 | 5 | 10 | 0 | 2.67 |
Main Street Capital | 0 | 1 | 2 | 0 | 2.67 |
The Bank of New York Mellon presently has a consensus target price of $49.80, suggesting a potential upside of 6.98%. Main Street Capital has a consensus target price of $35.80, suggesting a potential downside of 16.18%. Given The Bank of New York Mellon's higher possible upside, equities analysts clearly believe The Bank of New York Mellon is more favorable than Main Street Capital.
Summary
The Bank of New York Mellon beats Main Street Capital on 10 of the 15 factors compared between the two stocks.