Track the companies that matter to you. It's FREE! Click one of these fan favorites to get started: Apple; Google; Ford.



7 Things You Need to Know About BNY Mellon

Don't let it get away!

Keep track of the stocks that matter to you.

Help yourself with the Fool's FREE and easy new watchlist service today.

Bank of New York Mellon  (NYSE: BK  ) typically isn't one of the first big banks investors think of when they decide to plunk some of their hard-earned cash into financial stocks, but maybe it should be. It puts up some great numbers and operates in about as conservative a fashion as you could hope for -- so not only do you get great returns, your money is also safe.

Without further ado, then, here are seven easy-to-digest metrics that will help you get you started with one of my favorite big banks.

1. Great 2012 share-price performance
Those smarties who owned BoNY shares at the start of 2012 and held onto them until the end were rewarded with a gain of 25.30%. Not too shabby. No, it's not Bank of America (NYSE: BAC  ) , which rewarded its shareholders with a gain of 100.17% in 2012, but BoNY's performance comes with a lot fewer catches. More on that below.

2. Great 2013 share-price performance
BoNY shareholders are off to a strong start for 2013, with a year-to-date gain of 6.10%. B of A shareholders can only dream of a return like that this year; they've only seen a gain of 0.33% so far.

3. Attractive valuation
BoNY's price-to-book ratio is 0.94, which is right in the pocket. A P/B of 0.94 tells me the bank is a bit undervalued, but not too much -- not enough to raise any red flags. The idea here is, buy with a P/B of right around 1, and sell when and if P/B reaches 2.0.

B of A's P/B is 0.60. That's the kind of number -- especially post subprime-lending boom -- that raises red flags for me.

4. Great fourth-quarter performance
BoNY grew its 2012 Q4 earnings by 25.70% year over year, on revenue growth of just 4.6%. Now that's bang for your banking buck. This is very comparable to Citigroup's (NYSE: C  ) fourth-quarter performance: a 25.10% increase on net earnings on 5% earning's growth. Citi is another big bank that's underrated as an investment.

5. BoNY pays a decent dividend
JPMorgan Chase
(NYSE: JPM  ) may pay 2.4% -- lovely for one of the big banks -- but BoNY's 1.8% is respectable, and easily beats B of A's 0.3%, Citi's 0.1%, and even Goldman Sachs' 1.3%.

6. Fabulous stress-test results
The Federal Reserve has just released the first results of its 2013 stress tests: The Tier 1 common-ratio results, which measures capital as a share of risk-weighted assets. This ratio tells you how well the bank would perform in a severe economic downturn.

The Fed's minimum Tier 1 ratio is 5%, and BoNY's was a whopping 13.2%, easily surpassing JPMorgan's 6.3%, B of A's 6.8%, Citi's 8.3%, and even Wells Fargo's (NYSE: WFC  ) 7%. 

7. Increased asset-servicing and investment-management revenues
As increased post-crisis regulation begins to bite, and banks have to find new and less risky ways to make money, some -- including Goldman and Citi -- are turning to old standbys such as asset and investment management.

With a fourth-quarter 7% year-over-year increase in asset-servicing fees, and a 17% year-over-year increase in investment-management fees, BoNY is taking making significant progress down this increasingly important revenue trail. 

Final Foolish thought
There you have it -- seven easy metrics to help get your head around BoNY, a big American bank that doesn't get the attention it deserves. 

Want to learn even more about this underappreciated bank? Check out this new premium report by Anand Chokkavelu, Motley Fool Senior Banking Analyst and BoNY specialist. Anand's analysis will help you figure out whether this banker's bank is worthy of a spot on your Foolish Watchlist. Click here now to claim your copy.

Read/Post Comments (0) | Recommend This Article (4)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2307274, ~/Articles/ArticleHandler.aspx, 9/26/2016 10:43:42 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated Moments ago Sponsored by:
DOW 18,140.40 -121.05 -0.66%
S&P 500 2,154.31 -10.38 -0.48%
NASD 5,274.10 -31.65 -0.60%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

9/26/2016 10:25 AM
BK $39.82 Down -0.38 -0.95%
The Bank of New Yo… CAPS Rating: ****
BAC $15.38 Down -0.15 -0.93%
Bank of America CAPS Rating: ****
C $46.46 Down -0.69 -1.46%
Citigroup CAPS Rating: ***
JPM $66.66 Down -0.60 -0.88%
JPMorgan Chase CAPS Rating: ****
WFC $45.32 Down -0.42 -0.92%
Wells Fargo CAPS Rating: ****