Bank Of New York Mellon Corporation (The) (NYSE: BK) and Noah Holdings (NYSE:NOAH) are both finance companies, but which is the superior investment? We will compare the two businesses based on the strength of their profitability, dividends, valuation, earnings, analyst recommendations, risk and institutional ownership.

Institutional & Insider Ownership

81.8% of Bank Of New York Mellon Corporation (The) shares are held by institutional investors. Comparatively, 41.5% of Noah Holdings shares are held by institutional investors. 3.6% of Bank Of New York Mellon Corporation (The) shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Dividends

Bank Of New York Mellon Corporation (The) pays an annual dividend of $0.96 per share and has a dividend yield of 1.8%. Noah Holdings does not pay a dividend. Bank Of New York Mellon Corporation (The) pays out 28.4% of its earnings in the form of a dividend. Bank Of New York Mellon Corporation (The) has increased its dividend for 4 consecutive years.

Volatility and Risk

Bank Of New York Mellon Corporation (The) has a beta of 1.15, meaning that its stock price is 15% more volatile than the S&P 500. Comparatively, Noah Holdings has a beta of 2.44, meaning that its stock price is 144% more volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for Bank Of New York Mellon Corporation (The) and Noah Holdings, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Bank Of New York Mellon Corporation (The) 2 8 3 2 2.33
Noah Holdings 0 0 1 0 3.00

Bank Of New York Mellon Corporation (The) presently has a consensus target price of $53.71, indicating a potential downside of 0.16%. Noah Holdings has a consensus target price of $29.00, indicating a potential downside of 14.83%. Given Bank Of New York Mellon Corporation (The)’s higher possible upside, analysts plainly believe Bank Of New York Mellon Corporation (The) is more favorable than Noah Holdings.

Profitability

This table compares Bank Of New York Mellon Corporation (The) and Noah Holdings’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Bank Of New York Mellon Corporation (The) 23.35% 10.35% 1.07%
Noah Holdings 29.39% 18.42% 11.94%

Valuation & Earnings

This table compares Bank Of New York Mellon Corporation (The) and Noah Holdings’ revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Bank Of New York Mellon Corporation (The) $15.55 billion 3.57 $3.49 billion $3.38 15.92
Noah Holdings $409.59 million 3.30 $122.75 million $1.73 19.68

Bank Of New York Mellon Corporation (The) has higher revenue and earnings than Noah Holdings. Bank Of New York Mellon Corporation (The) is trading at a lower price-to-earnings ratio than Noah Holdings, indicating that it is currently the more affordable of the two stocks.

Summary

Bank Of New York Mellon Corporation (The) beats Noah Holdings on 11 of the 18 factors compared between the two stocks.

Bank Of New York Mellon Corporation (The) Company Profile

The Bank of New York Mellon Corporation is an investments company. The Company operates businesses through two segments: Investment Management and Investment Services. The Company also has an Other segment, which includes the leasing portfolio, corporate treasury activities (including its investment securities portfolio), derivatives and other trading, corporate and bank-owned life insurance and renewable energy investments, and business exits. As of December 31, 2016, the Company had $29.9 trillion in assets under custody and/or administration and $1.6 trillion in assets under management. The Company’s Investment Management boutiques offer a range of actively managed equity, fixed income, alternative and liability-driven investments, along with passive products and cash management. The Company offers asset servicing, clearing services, issuer services and treasury services to its clients.

Noah Holdings Company Profile

Noah Holdings Limited is a wealth management service provider with a focus on global wealth investment and asset allocation services for high net worth individuals and enterprises in China. The Company operates through three segments: wealth management, asset management and Internet finance. It also provides Internet finance services to clients in China. It provides direct access to China’s high net worth population. With approximately 1,100 relationship managers in over 130 branch offices, its coverage network includes China’s regions where high net worth population is concentrated, including the Yangtze River Delta, the Pearl River Delta, the Bohai Rim and other regions. Its product offerings consist primarily of over-the-counter (OTC) wealth management and OTC asset management products, mutual fund products and asset management plans originated in China and designed to cater to the needs of China’s high net worth population.

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