Bank Of New York Mellon Corporation (The) (BK) & Safeguard Scientifics (SFE) Critical Review

Bank Of New York Mellon Corporation (The) (NYSE: BK) and Safeguard Scientifics (NYSE:SFE) are both finance companies, but which is the better business? We will contrast the two companies based on the strength of their earnings, institutional ownership, profitability, dividends, analyst recommendations, risk and valuation.

Profitability

This table compares Bank Of New York Mellon Corporation (The) and Safeguard Scientifics’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Bank Of New York Mellon Corporation (The) 23.35% 10.35% 1.07%
Safeguard Scientifics N/A -61.90% -42.77%

Risk and Volatility

Bank Of New York Mellon Corporation (The) has a beta of 1.14, meaning that its share price is 14% more volatile than the S&P 500. Comparatively, Safeguard Scientifics has a beta of 1.3, meaning that its share price is 30% more volatile than the S&P 500.

Dividends

Bank Of New York Mellon Corporation (The) pays an annual dividend of $0.96 per share and has a dividend yield of 1.9%. Safeguard Scientifics does not pay a dividend. Bank Of New York Mellon Corporation (The) pays out 28.4% of its earnings in the form of a dividend. Safeguard Scientifics has raised its dividend for 4 consecutive years.

Analyst Ratings

This is a summary of recent ratings and target prices for Bank Of New York Mellon Corporation (The) and Safeguard Scientifics, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Bank Of New York Mellon Corporation (The) 2 8 3 2 2.33
Safeguard Scientifics 0 0 0 0 N/A

Bank Of New York Mellon Corporation (The) currently has a consensus price target of $53.43, indicating a potential upside of 3.68%. Given Bank Of New York Mellon Corporation (The)’s higher possible upside, equities research analysts clearly believe Bank Of New York Mellon Corporation (The) is more favorable than Safeguard Scientifics.

Institutional & Insider Ownership

81.8% of Bank Of New York Mellon Corporation (The) shares are owned by institutional investors. Comparatively, 77.6% of Safeguard Scientifics shares are owned by institutional investors. 3.6% of Bank Of New York Mellon Corporation (The) shares are owned by insiders. Comparatively, 2.7% of Safeguard Scientifics shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Earnings and Valuation

This table compares Bank Of New York Mellon Corporation (The) and Safeguard Scientifics’ revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Bank Of New York Mellon Corporation (The) $15.55 billion 3.42 $3.49 billion $3.38 15.25
Safeguard Scientifics N/A N/A -$17.72 million ($4.76) -2.68

Bank Of New York Mellon Corporation (The) has higher revenue and earnings than Safeguard Scientifics. Safeguard Scientifics is trading at a lower price-to-earnings ratio than Bank Of New York Mellon Corporation (The), indicating that it is currently the more affordable of the two stocks.

Summary

Bank Of New York Mellon Corporation (The) beats Safeguard Scientifics on 12 of the 15 factors compared between the two stocks.

About Bank Of New York Mellon Corporation (The)

The Bank of New York Mellon Corporation is an investments company. The Company operates businesses through two segments: Investment Management and Investment Services. The Company also has an Other segment, which includes the leasing portfolio, corporate treasury activities (including its investment securities portfolio), derivatives and other trading, corporate and bank-owned life insurance and renewable energy investments, and business exits. As of December 31, 2016, the Company had $29.9 trillion in assets under custody and/or administration and $1.6 trillion in assets under management. The Company’s Investment Management boutiques offer a range of actively managed equity, fixed income, alternative and liability-driven investments, along with passive products and cash management. The Company offers asset servicing, clearing services, issuer services and treasury services to its clients.

About Safeguard Scientifics

Safeguard Scientifics, Inc. is engaged in providing capital to technology companies within the fields of healthcare, financial services and digital media. The Company holds interest in companies, which it refers to as partner companies. As of December 31, 2016, the Company held interests in 29 non-consolidated partner companies. The Company offers operational and management support to each of its partner companies. In addition to management and operational support, the Company offers ongoing planning and development assessment. It provides mentoring, advice and guidance to develop partner company management. The Company serves on the boards of directors of its partner companies, working with them to develop and implement strategic and operating plans. It measures and monitors achievement of these plans through regular review of operational and financial performance measurements.

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