The Bank of New York Mellon (NYSE:BK) and Capstar Financial (NASDAQ:CSTR) are both finance companies, but which is the superior stock? We will contrast the two businesses based on the strength of their dividends, risk, institutional ownership, earnings, profitability, valuation and analyst recommendations.
This table compares The Bank of New York Mellon and Capstar Financial’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|The Bank of New York Mellon||22.86%||9.27%||0.83%|
The Bank of New York Mellon pays an annual dividend of $1.24 per share and has a dividend yield of 2.5%. Capstar Financial pays an annual dividend of $0.24 per share and has a dividend yield of 1.1%. The Bank of New York Mellon pays out 30.9% of its earnings in the form of a dividend. Capstar Financial pays out 16.9% 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. The Bank of New York Mellon has increased its dividend for 1 consecutive years and Capstar Financial has increased its dividend for 1 consecutive years.
Risk & Volatility
The Bank of New York Mellon has a beta of 1.08, meaning that its stock price is 8% more volatile than the S&P 500. Comparatively, Capstar Financial has a beta of 1.15, meaning that its stock price is 15% more volatile than the S&P 500.
This is a breakdown of current ratings and price targets for The Bank of New York Mellon and Capstar Financial, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|The Bank of New York Mellon||0||4||8||0||2.67|
The Bank of New York Mellon presently has a consensus price target of $52.23, suggesting a potential upside of 4.34%. Capstar Financial has a consensus price target of $20.00, suggesting a potential downside of 4.49%. Given The Bank of New York Mellon’s higher possible upside, analysts clearly believe The Bank of New York Mellon is more favorable than Capstar Financial.
Earnings & Valuation
This table compares The Bank of New York Mellon and Capstar Financial’s top-line revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|The Bank of New York Mellon||$16.94 billion||2.59||$3.62 billion||$4.01||12.48|
|Capstar Financial||$135.10 million||3.42||$24.70 million||$1.42||14.75|
The Bank of New York Mellon has higher revenue and earnings than Capstar Financial. The Bank of New York Mellon is trading at a lower price-to-earnings ratio than Capstar Financial, indicating that it is currently the more affordable of the two stocks.
Institutional & Insider Ownership
82.0% of The Bank of New York Mellon shares are owned by institutional investors. Comparatively, 37.0% of Capstar Financial shares are owned by institutional investors. 0.1% of The Bank of New York Mellon shares are owned by insiders. Comparatively, 9.9% of Capstar Financial shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.
About The 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 three segments: Investment Services, Investment and Wealth Management, and Other. The Investment Service segment offers custody, trust and depositary, accounting, exchange-traded funds services, middle-office solutions, transfer agency, services for private equity and real estate funds, foreign exchange, securities lending, liquidity/lending services, brokerage and data analytics, clearing, investment, wealth and retirement solutions, technology and enterprise data management, trading, corporate trust, depositary receipts, payments, foreign exchange, liquidity management, receivables processing and payables management, trade finance and processing, collateral management, and tri-party services. The Investment and Wealth Management segment provides diversified 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 leasing, corporate treasury, derivative and other trading, corporate and bank-owned life insurance, renewable energy investment, and business exit activities. It serves central banks and sovereigns, financial institutions, asset managers, insurance companies, corporations, local authorities and high net-worth individuals, and family offices. The company was founded in 1784 and is headquartered in New York, New York.
About Capstar Financial
CapStar Financial Holdings, Inc. operates as the bank holding company for CapStar Bank that provides banking services to consumer and corporate customers located primarily in Tennessee, the United States. Its deposit products and services include demand deposits, interest-bearing transaction accounts, money market accounts, time and savings deposits, certificates of deposit, and CDARS reciprocal products. The company also provides commercial and consumer real estate, construction and land development, commercial and industrial, consumer, and other loans. In addition, it offers mortgage banking products and services; private banking and wealth management services for the owners and operators of business clients and other high net worth individuals; and correspondent banking services to community banks. Further, the company provides telephone and online banking, direct deposit, mobile banking, safe deposit box, remote deposit, and cash management services for individuals, and small and medium sized businesses. CapStar Financial Holdings, Inc. was incorporated in 2015 and is headquartered in Nashville, Tennessee.
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