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Category: Stock Market and Bank of New York Mellon
Date: 17 April 2020 Stock Price: $37.25 We take a look at the 1st quarter earnings report of their 2019 fiscal year of Bank of New York Mellon, a global investment company with over $1.8 trillion in assets under management.
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About Bank of New York Mellon
BNY Mellon is a global investments company dedicated to helping its clients manage and service their financial assets throughout the investment lifecycle. Whether providing financial services for institutions, corporations or individual investors, BNY Mellon delivers informed investment management and investment services in 35 countries. As of Dec. 31, 2019, BNY Mellon had $37.1 trillion in assets under custody and/or administration, and $1.9 trillion in assets under management. BNY Mellon can act as a single point of contact for clients looking to create, trade, hold, manage, service, distribute or restructure investments. BNY Mellon is the corporate brand of The Bank of New York Mellon Corporation (NYSE: BK). A
Overview of Bank of New York Mellon's 1st quarter 2020earnings report
Data below refers to quarterly data unless specified otherwise:
- Total revenue: $4.108 billion (up from $3.899 billion for the same period of the previous year)
- Total revenue increased by 5% over the last 12 months
- Total noninterest expenses: $2.712 billion (up from $2.699 billion for the same period of the previous year)
- Total noninterest expenses increased by 0.4% over the last 12 months
- Net income: $962 million (up 1% from $956 million for the same period of the previous year)
- Diluted earnings per share: $1.05 (up 12% from $0.94 for the same period of the previous year)
- PE ratio of Bank of New York Mellon: 8.9
- Dividend declared: $0.31
- Dividend yield of Bank of New York Mellon: 3.32%
- Diluted weighted-average shares outstanding: 896.689 million (down -7.2% from 965.960 million for the same period of the previous year)
- Book value per share: $42.47 (up 7.9% from $38.63 for the same period of the previous year)
- Cash and cash equivalents: $5.091 billion
- Cash and cash equivalents per share: $5.67
- Cash and cash equivalents makes up 15.24% of Bank of New York Mellon's market capital
- Cash and cash equivalents makes up 1.1% of Bank of New York Mellon's total assets
- Loans net of allowances for losses: $62.228 billion
- Loans net of allowances makes up 13.3% of Bank of New York Mellon's total assets
- Goodwill: $17.240 billion
- Goodwill makes up 3.68% of Bank of New York Mellon's total assets
- Goodwill per stock: $19.22
- Stockholders equity in Bank of New York Mellon: $41.239 billion
- Stockholders equity per share: $45.99
- So Bank of New York Mellon is trading a 0.81 times its stockholders equity which is well outside the expected range of between 2 and 4 which most firms tend to trade at.
- For some perspective the S&P 500 has a price to book value of 3.34. Read more about the S&P 500 here
Bank of New York Mellon's management commentary on their 1st quarter 2020 earnings report
NEW YORK, April 16, 2020 – The Bank of New York Mellon Corporation (“BNY Mellon”) (NYSE: BK) today reported:
- Net income applicable to common shareholders (in millions) $ 944
- Diluted earnings per common share $ 1.05
“I am deeply honored to become CEO of this great company. While looking ahead to drive improved performance and capabilities and ensure BNY Mellon remains a great place to work, in the immediate term we are focused on being there for our clients. Our team’s efforts on this front have been exceptional. I have been incredibly gratified by the feedback from clients, who see our people going above and beyond to deliver great service. I want to thank our clients for their ongoing partnership and thank our employees around the globe for their exceptional dedication and professionalism. I am confident in our ability to weather this adversity and to carry forward that energy into advancing our growth agenda as the world recovers,” Mr. Gibbons concluded.
Bank of New York Mellon (NYSE: BK) stock price history
The image below, obtained from Google, shows the stock price history of Bank of New York Mellon over the last 5 years. And it's been an average time for Bank of New York Mellon stockholders. 5 years ago the stock was trading at around $40.50 a stock and its currently trading at $37.25 a stock. That's a loss of -8% suffered by Bank of New York Mellon stockholders over the last 5 years.
The stock of Bank of New York Mellon is trading at closer to its 52 week low of $26.40 than it is to its 52 week high of $51.607 which to us is a clear indication that the short term sentiment and momentum of Bank of New York Mellon's stock is negative, which is hardly surprising considering the massive sell off in global markers in recent months which was triggered by the Covid-19 pandemic and the impact it has had on global growth. Read more on the Covid-19 triggered market sell off here
The stock of Bank of New York Mellon is trading at closer to its 52 week low of $26.40 than it is to its 52 week high of $51.607 which to us is a clear indication that the short term sentiment and momentum of Bank of New York Mellon's stock is negative, which is hardly surprising considering the massive sell off in global markers in recent months which was triggered by the Covid-19 pandemic and the impact it has had on global growth. Read more on the Covid-19 triggered market sell off here
Recent coverage of Bank of New York Mellon
The extract below discusses the latest regarding Bank of New York Mellon as obtained from TheStreet.com
Bank of New York Mellon (BK) rose Thursday as the financial services giant emerged as a bright spot in a banking sector battered by the coronavirus downturn, posting stronger than expected quarterly numbers. BNY Mellon's stock price jumped 3.7% to $35.91 a share in trading Thursday after the bank scored beats on both earnings and revenue for the first quarter of 2020.
The bank posted earnings of $1.05 a share for the first quarter, blowing past the 91-cents-a-share estimate of analysts surveyed by Zacks Investment Research, while also coming in well above 94 cents a share the bank reported during the same quarter last year. BNY Mellon also saw revenue increase 5% in the first quarter, rising to $4.1 billion. That also came in well above the Zacks' estimate, which had predicted a 1.3% decline to $3.82 billion. A 10% jump in transaction fees amid a tumultuous quarter for the markets and the economy helped buoy the bank's bottom line. Fee revenue hit $3.3 billion for the quarter, up from $3 billion during the first quarter of 2019.
Read the full article here
Bank of New York Mellon (BK) rose Thursday as the financial services giant emerged as a bright spot in a banking sector battered by the coronavirus downturn, posting stronger than expected quarterly numbers. BNY Mellon's stock price jumped 3.7% to $35.91 a share in trading Thursday after the bank scored beats on both earnings and revenue for the first quarter of 2020.
The bank posted earnings of $1.05 a share for the first quarter, blowing past the 91-cents-a-share estimate of analysts surveyed by Zacks Investment Research, while also coming in well above 94 cents a share the bank reported during the same quarter last year. BNY Mellon also saw revenue increase 5% in the first quarter, rising to $4.1 billion. That also came in well above the Zacks' estimate, which had predicted a 1.3% decline to $3.82 billion. A 10% jump in transaction fees amid a tumultuous quarter for the markets and the economy helped buoy the bank's bottom line. Fee revenue hit $3.3 billion for the quarter, up from $3 billion during the first quarter of 2019.
Read the full article here
Bank of New York Mellon (NYSE: BK) latest stock valuation
So what is Bank of New York Mellon stock worth based on the release of their 1st quarter 2020 earnings earnings report? Based on Bank of New York Mellon's latest earnings report our valuation models provide a target price (full valueprice) for Bank of New York Mellon stock at $48.70 a stock (down slightly from our 4th quarter 2019 earnings review valuation of Bank of New York Mellon. We therefore believe that the stock of Bank of New York Mellon is undervalued at its current price of $37.25
We usually suggest that long term and fundamental investors get in at least 10% below our target (full value) price which in this case is $48.70. Therefore we believe a good entry point into Bank of New York Mellon stock is at $43.90 or below. Since the stock of Bank of New York Mellon is trading at below our suggested entry point we rate the stock of Bank of New York Mellon as a long term buy
Once the Covid-19 pandemic is over and life returns to normal we expect the stock of Bank of New York Mellon to tick up nicely to levels closer to our target price
We usually suggest that long term and fundamental investors get in at least 10% below our target (full value) price which in this case is $48.70. Therefore we believe a good entry point into Bank of New York Mellon stock is at $43.90 or below. Since the stock of Bank of New York Mellon is trading at below our suggested entry point we rate the stock of Bank of New York Mellon as a long term buy
Once the Covid-19 pandemic is over and life returns to normal we expect the stock of Bank of New York Mellon to tick up nicely to levels closer to our target price
Next earnings release date for Bank of New York Mellon
It is expected that Bank of New York Mellon (NYSE: BK) 2nd quarter 2020 earnings report will be released in the middle of July 2020