Bank of New York Mellon (NYSE:BK – Get Free Report) and Popular (NASDAQ:BPOP – Get Free Report) are both finance companies, but which is the better investment? We will contrast the two companies based on the strength of their profitability, earnings, dividends, analyst recommendations, risk, valuation and institutional ownership.
Dividends
Bank of New York Mellon pays an annual dividend of $1.88 per share and has a dividend yield of 2.6%. Popular pays an annual dividend of $2.48 per share and has a dividend yield of 2.5%. Bank of New York Mellon pays out 43.5% of its earnings in the form of a dividend. Popular pays out 36.8% 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 raised its dividend for 14 consecutive years. Bank of New York Mellon is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Institutional & Insider Ownership
85.3% of Bank of New York Mellon shares are held by institutional investors. Comparatively, 87.3% of Popular shares are held by institutional investors. 0.1% of Bank of New York Mellon shares are held by insiders. Comparatively, 2.1% of Popular shares are held 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.
Valuation & Earnings
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Bank of New York Mellon | $17.49 billion | 3.07 | $3.29 billion | $4.32 | 16.63 |
| Popular | $2.71 billion | 2.68 | $541.34 million | $6.74 | 14.88 |
Bank of New York Mellon has higher revenue and earnings than Popular. Popular 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.
Analyst Recommendations
This is a breakdown of current ratings for Bank of New York Mellon and Popular, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Bank of New York Mellon | 0 | 4 | 7 | 0 | 2.64 |
| Popular | 0 | 2 | 7 | 0 | 2.78 |
Bank of New York Mellon currently has a consensus target price of $67.86, indicating a potential downside of 5.51%. Popular has a consensus target price of $106.00, indicating a potential upside of 5.70%. Given Popular’s stronger consensus rating and higher probable upside, analysts clearly believe Popular is more favorable than Bank of New York Mellon.
Risk and Volatility
Bank of New York Mellon has a beta of 1.08, suggesting that its share price is 8% more volatile than the S&P 500. Comparatively, Popular has a beta of 0.78, suggesting that its share price is 22% less volatile than the S&P 500.
Profitability
This table compares Bank of New York Mellon and Popular’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Bank of New York Mellon | 9.40% | 11.87% | 1.03% |
| Popular | 12.20% | 11.73% | 0.83% |
Summary
Bank of New York Mellon beats Popular on 9 of the 16 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 Popular
Popular, Inc., through its subsidiaries, provides various retail, mortgage, and commercial banking products and services in Puerto Rico, the United States, and the British Virgin Islands. The company provides savings, NOW, money market, and other interest-bearing demand accounts; non-interest bearing demand deposits; and certificates of deposit. It also offers commercial and industrial, commercial multi-family, commercial real estate, and residential mortgage loans; consumer loans, including personal loans, credit cards, automobile loans, home equity lines of credit, and other loans to individual borrowers; construction loans; and lease financing comprising automobile loans/leases. In addition, the company provides investment banking, auto and equipment leasing and financing, broker-dealer, and insurance services; debit cards; and online banking services. Popular, Inc. was founded in 1893 and is headquartered in Hato Rey, Puerto Rico.
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