Bank of New York Mellon Corp (NYSE: BK)

Sector: Financial Services Industry: Banks - Diversified CIK: 0001390777
Market Cap 143.13 Bn
P/B 4.14
P/E 63.87
P/S 9.95
ROIC (Qtr) 5.96
Div Yield % 0.88
Rev 1y % (Qtr) 9.32
Total Debt (Qtr) 51.52 Bn
Debt/Equity (Qtr) 1.17
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About

Investment thesis

Bull case

  • Strong tangible asset base of 435.70B provides 8.46x coverage of total debt 51.52B, indicating robust asset backing and low credit risk.
  • Operating cash flow of 3.10B provides exceptional 110.54x coverage of minority interest expenses 28M, showing strong core operations.
  • Cash position of 122.45B provides exceptional 4373.21x coverage of minority interest expenses 28M, indicating strong liquidity.
  • Retained earnings of 45.35B represent substantial 1.03x of equity 43.88B, indicating strong internal capital generation.
  • Retained earnings of 45.35B provide strong 2.31x coverage of intangibles 19.61B, indicating quality earnings retention.

Bear case

  • Operating cash flow of 3.10B barely covers its investment activities of (21.89B), with a coverage ratio of -0.14, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Operating cash flow of 3.10B provides thin coverage of dividend payments of (1.42B) with a -2.18 ratio, suggesting potential dividend sustainability issues if operational performance deteriorates.
  • High depreciation of 1.73B relative to operating cash flow of 3.10B, which is 0.56x suggests significant maintenance capital requirements affecting free cash flow.
  • Free cash flow of 1.56B represents just 0.23x of debt issuance 6.71B, suggesting concerning reliance on leverage rather than internal cash generation for growth.
  • Retained earnings of 45.35B provide limited buffer against comprehensive income items of (3.36B), which is -13.49x, indicating elevated exposure to market risks.

Segments Breakdown of Revenue (2024)

Geographical Breakdown of Revenue (2024)

Peer comparison

Companies in the Banks - Diversified
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 JPM Jpmorgan Chase & Co 1,043.32 Bn 33.97 9.59 942.38 Bn
2 BAC Bank Of America Corp /De/ 532.79 Bn 28.35 6.13 708.27 Bn
3 WFC Wells Fargo & Company/Mn 446.49 Bn 124.86 10.43 408.42 Bn
4 C Citigroup Inc 376.35 Bn 51.48 4.87 720.33 Bn
5 RY Royal Bank Of Canada 244.65 Bn 16.82 5.14 9.97 Bn
6 TD Toronto Dominion Bank 165.03 Bn 11.57 3.41 7.67 Bn
7 BK Bank of New York Mellon Corp 143.13 Bn 63.87 9.95 51.52 Bn
8 BMO Bank Of Montreal /Can/ 107.49 Bn 17.28 4.15 179.01 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 0.16 0.22
EV to Cash from Ops. EV/CFO 46.39 241.80
EV to Debt EV to Debt 1.43 2.53
EV to EBIT EV/EBIT 23.92 33.73
EV to EBITDA EV/EBITDA 18.47 25.98
EV to Free Cash Flow [EV/FCF] EV/FCF 70.16 245.05
EV to Market Cap EV to Market Cap 0.51 1.98
EV to Revenue EV/Rev 5.12 9.02
Price to Book Value [P/B] P/B 4.14 3.87
Price to Earnings [P/E] P/E 63.87 33.57
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) 3.03 2.37
Dividend Payout Ratio % Div Payout % (Qtr) 27.70 29.28
Dividend per Basic Share Div per Share (Qtr) 2.00 2.04
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 90.21 15.72
Interest Coverage Interest Coverage 0.00 0.00
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) -15.47 -5.81
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 3.93 -8.06
Dividend Growth (1y) % Div 1y % (Qtr) 12.36 -10.21
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 46.33 32.26
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 22.77 22.90
EBIT Growth (1y) % EBIT 1y % (Qtr) 43.28 30.58
EBT Growth (1y) % EBT 1y % (Qtr) 43.28 30.58
EPS Growth (1y) % EPS 1y % (Qtr) 54.53 38.83
FCF Growth (1y) % FCF 1y % (Qtr) 136.77 235.05
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 8.92 9.67
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.04 0.03
Cash Payout Ratio Cash Payout (Qtr) 0.32 0.17
Cash Ratio Cash Ratio 0.00 0.00
Current Ratio Current Ratio 0.00 0.00
Debt to Equity Ratio Debt/Equity (Qtr) 1.17 3.24
Interest Cover Ratio Interest Cover Ratio 0.00 0.00
Times Interest Earned Times Interest Earned 0.00 0.00
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 42.50 38.15
EBIT Margin % EBIT Margin % (Qtr) 33.71 38.03
EBT Margin % EBT Margin % (Qtr) 33.71 33.01
Gross Margin % Gross Margin % (Qtr) 100.00 98.96
Net Profit Margin % Net Margin % (Qtr) 25.40 26.44