Bank of New York Mellon (NYSE:BNY – Get Free Report) and Invesco (NYSE:IVZ – Get Free Report) are both large-cap finance companies, but which is the superior stock? We will compare the two companies based on the strength of their earnings, profitability, analyst recommendations, valuation, risk, dividends and institutional ownership.
Dividends
Bank of New York Mellon pays an annual dividend of $2.52 per share and has a dividend yield of 1.8%. Invesco pays an annual dividend of $0.86 per share and has a dividend yield of 3.1%. Bank of New York Mellon pays out 29.3% of its earnings in the form of a dividend. Invesco pays out -126.5% 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. Bank of New York Mellon has increased its dividend for 14 consecutive years and Invesco has increased its dividend for 5 consecutive years. Invesco is clearly the better dividend stock, given its higher yield and lower payout ratio.
Insider and Institutional Ownership
85.3% of Bank of New York Mellon shares are owned by institutional investors. Comparatively, 66.1% of Invesco shares are owned by institutional investors. 0.2% of Bank of New York Mellon shares are owned by insiders. Comparatively, 1.4% of Invesco shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.
Earnings & Valuation
This table compares Bank of New York Mellon and Invesco”s gross revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Bank of New York Mellon | $40.76 billion | 2.38 | $5.55 billion | $8.59 | 16.68 |
| Invesco | $6.38 billion | 1.96 | -$281.70 million | ($0.68) | -41.46 |
Bank of New York Mellon has higher revenue and earnings than Invesco. Invesco is trading at a lower price-to-earnings ratio than Bank of New York Mellon, indicating that it is currently the more affordable of the two stocks.
Profitability
This table compares Bank of New York Mellon and Invesco’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Bank of New York Mellon | 15.52% | 16.00% | 1.27% |
| Invesco | -0.93% | 12.83% | 5.03% |
Risk & Volatility
Bank of New York Mellon has a beta of 1.06, suggesting that its share price is 6% more volatile than the S&P 500. Comparatively, Invesco has a beta of 1.65, suggesting that its share price is 65% more volatile than the S&P 500.
Analyst Recommendations
This is a summary of current recommendations for Bank of New York Mellon and Invesco, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Bank of New York Mellon | 0 | 6 | 7 | 1 | 2.64 |
| Invesco | 0 | 8 | 5 | 1 | 2.50 |
Bank of New York Mellon presently has a consensus target price of $164.85, suggesting a potential upside of 15.08%. Invesco has a consensus target price of $33.12, suggesting a potential upside of 17.46%. Given Invesco’s higher probable upside, analysts clearly believe Invesco is more favorable than Bank of New York Mellon.
Summary
Bank of New York Mellon beats Invesco on 11 of the 17 factors compared between the two stocks.
About Bank of New York Mellon
The Bank of New York Mellon Corporation provides a range of financial products and services in the United States and internationally. The company operates through Securities Services, Market and Wealth Services, Investment and Wealth Management, and other segments. The Securities Services segment offers custody, trust and depositary, accounting, exchange-traded funds, middle-office solutions, transfer agency, services for private equity and real estate funds, foreign exchange, securities lending, liquidity/lending services, and data analytics. This segment also provides trustee, paying agency, fiduciary, escrow and other financial, issuer, and support services for brokers and investors. The Market and Wealth Services segment offers clearing and custody, investment, wealth and retirement solutions, technology and enterprise data management, trading, and prime brokerage services. This segment also provides integrated cash management solutions, including payments, foreign exchange, liquidity management, receivables processing and payables management, and trade finance and processing services. The Investment and Wealth Management segment offers investment management strategies and distribution of investment products, investment management, custody, wealth and estate planning, private banking, investment, and information management services. The Other segment engages in the provision of leasing, corporate treasury, derivative and other trading, corporate and bank-owned life insurance, renewable energy investment, and business exit services. It serves central banks and sovereigns, financial institutions, asset managers, insurance companies, corporations, local authorities and high net-worth individuals, and family offices. The Bank of New York Mellon Corporation was founded in 1784 and is headquartered in New York, New York.
About Invesco
Invesco Ltd. is a publicly owned investment manager. The firm provides its services to retail clients, institutional clients, high-net worth clients, public entities, corporations, unions, non-profit organizations, endowments, foundations, pension funds, financial institutions, and sovereign wealth funds. It manages separate client-focused equity and fixed income portfolios. The firm also launches equity, fixed income, commodity, multi-asset, and balanced mutual funds for its clients. It launches equity, fixed income, multi-asset, and balanced exchange-traded funds. The firm also launches and manages private funds. It invests in the public equity and fixed income markets across the globe. The firm also invests in alternative markets, such as commodities and currencies. For the equity portion of its portfolio, it invests in growth and value stocks of large-cap, mid-cap, and small-cap companies. For the fixed income portion of its portfolio, the firm invests in convertibles, government bonds, municipal bonds, treasury securities, and cash. It also invests in short term and intermediate term bonds, investment grade and high yield bonds, taxable and tax-free bonds, senior secured loans, and structured securities such as asset-backed securities, mortgage-backed securities, and commercial mortgage-backed securities. The firm employs absolute return, global macro, and long/short strategies. It employs quantitative analysis to make its investments. The firm was formerly known as Invesco Plc, AMVESCAP plc, Amvesco plc, Invesco PLC, Invesco MIM, and H. Lotery & Co. Ltd. Invesco Ltd. was founded in 1935 and is based in Atlanta, Georgia with an additional office in Hamilton, Bermuda.
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