Brookfield Asset Management (BAM) and Bank Of New York Mellon Corporation (The) (BK) Financial Survey

Brookfield Asset Management (NYSE: BAM) and Bank Of New York Mellon Corporation (The) (NYSE:BK) are both large-cap finance companies, but which is the superior business? We will compare the two businesses based on the strength of their institutional ownership, dividends, valuation, analyst recommendations, profitability, earnings and risk.

Analyst Ratings

This is a breakdown of current ratings for Brookfield Asset Management and Bank Of New York Mellon Corporation (The), as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Brookfield Asset Management 0 1 7 0 2.88
Bank Of New York Mellon Corporation (The) 2 8 3 2 2.33

Brookfield Asset Management presently has a consensus price target of $43.56, indicating a potential upside of 7.01%. Bank Of New York Mellon Corporation (The) has a consensus price target of $53.71, indicating a potential upside of 2.47%. Given Brookfield Asset Management’s stronger consensus rating and higher possible upside, equities research analysts clearly believe Brookfield Asset Management is more favorable than Bank Of New York Mellon Corporation (The).

Insider & Institutional Ownership

53.7% of Brookfield Asset Management shares are owned by institutional investors. Comparatively, 81.8% of Bank Of New York Mellon Corporation (The) shares are owned by institutional investors. 3.6% of Bank Of New York Mellon Corporation (The) shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Profitability

This table compares Brookfield Asset Management and Bank Of New York Mellon Corporation (The)’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Brookfield Asset Management 4.87% 2.10% 0.84%
Bank Of New York Mellon Corporation (The) 23.35% 10.35% 1.07%

Volatility and Risk

Brookfield Asset Management has a beta of 1.03, indicating that its stock price is 3% more volatile than the S&P 500. Comparatively, Bank Of New York Mellon Corporation (The) has a beta of 1.14, indicating that its stock price is 14% more volatile than the S&P 500.

Earnings & Valuation

This table compares Brookfield Asset Management and Bank Of New York Mellon Corporation (The)’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Brookfield Asset Management $30.02 billion 1.30 $8.47 billion $1.28 31.80
Bank Of New York Mellon Corporation (The) $15.55 billion 3.48 $3.49 billion $3.38 15.51

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

Dividends

Brookfield Asset Management pays an annual dividend of $0.56 per share and has a dividend yield of 1.4%. Bank Of New York Mellon Corporation (The) pays an annual dividend of $0.96 per share and has a dividend yield of 1.8%. Brookfield Asset Management pays out 43.8% of its earnings in the form of a dividend. Bank Of New York Mellon Corporation (The) pays out 28.4% 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. Brookfield Asset Management has raised its dividend for 5 consecutive years and Bank Of New York Mellon Corporation (The) has raised its dividend for 4 consecutive years. Bank Of New York Mellon Corporation (The) is clearly the better dividend stock, given its higher yield and lower payout ratio.

Summary

Bank Of New York Mellon Corporation (The) beats Brookfield Asset Management on 11 of the 18 factors compared between the two stocks.

About Brookfield Asset Management

Brookfield Asset Management Inc. is an alternative asset manager. The Company operates in eight segments. The Asset Management segment manages its listed partnerships, private funds and public markets on behalf of its clients. The Property segment includes the ownership, operation and development of office, retail and other properties. The Renewable power segment operates and develops hydroelectric, wind power and other generating facilities. The Infrastructure segment includes the ownership, operation and development of utilities and agricultural operations, among others. The Residential development segment includes homebuilding, condominium development and land development. The Service activities segment includes construction management and contracting services and property services. The Private equity segment includes the investments and operations overseen by its private equity group. The Corporate activities segment includes the allocation of capital to its operating platforms.

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.

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