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U.S. Bancorp (NYSE:USB – Get Free Report) and Bank of New York Mellon (NYSE:BK – Get Free Report) are both large-cap finance companies, but which is the better business? We will contrast the two companies based on the strength of their dividends, risk, valuation, earnings, institutional ownership, analyst recommendations and profitability.
Insider and Institutional Ownership
77.6% of U.S. Bancorp shares are owned by institutional investors. Comparatively, 85.3% of Bank of New York Mellon shares are owned by institutional investors. 0.2% of U.S. Bancorp shares are owned by insiders. Comparatively, 0.1% of Bank of New York Mellon shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.
Dividends
U.S. Bancorp pays an annual dividend of $2.00 per share and has a dividend yield of 4.1%. Bank of New York Mellon pays an annual dividend of $2.12 per share and has a dividend yield of 2.0%. U.S. Bancorp pays out 47.8% of its earnings in the form of a dividend. Bank of New York Mellon pays out 32.4% 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. U.S. Bancorp has increased its dividend for 14 consecutive years and Bank of New York Mellon has increased its dividend for 14 consecutive years.
Valuation & Earnings
This table compares U.S. Bancorp and Bank of New York Mellon”s gross revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| U.S. Bancorp | $27.72 billion | 2.73 | $6.30 billion | $4.18 | 11.63 |
| Bank of New York Mellon | $39.91 billion | 1.85 | $4.53 billion | $6.55 | 15.96 |
U.S. Bancorp has higher earnings, but lower revenue than Bank of New York Mellon. U.S. Bancorp 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 recent ratings and target prices for U.S. Bancorp and Bank of New York Mellon, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| U.S. Bancorp | 1 | 6 | 13 | 1 | 2.67 |
| Bank of New York Mellon | 0 | 6 | 8 | 0 | 2.57 |
U.S. Bancorp currently has a consensus price target of $52.55, suggesting a potential upside of 8.13%. Bank of New York Mellon has a consensus price target of $95.08, suggesting a potential downside of 9.05%. Given U.S. Bancorp’s stronger consensus rating and higher probable upside, equities analysts clearly believe U.S. Bancorp is more favorable than Bank of New York Mellon.
Profitability
This table compares U.S. Bancorp and Bank of New York Mellon’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| U.S. Bancorp | 16.30% | 13.08% | 1.02% |
| Bank of New York Mellon | 12.27% | 13.46% | 1.16% |
Volatility and Risk
U.S. Bancorp has a beta of 1.01, meaning that its share price is 1% more volatile than the S&P 500. Comparatively, Bank of New York Mellon has a beta of 1.12, meaning that its share price is 12% more volatile than the S&P 500.
Summary
U.S. Bancorp beats Bank of New York Mellon on 9 of the 17 factors compared between the two stocks.
About U.S. Bancorp
U.S. Bancorp, a financial services holding company, provides various financial services to individuals, businesses, institutional organizations, governmental entities, and other financial institutions in the United States. It operates through Wealth, Corporate, Commercial and Institutional Banking; Consumer and Business Banking; Payment Services; and Treasury and Corporate Support segments. The company offers depository services, including checking accounts, savings accounts, and time certificate contracts; and lending services, such as traditional credit products and credit card services, lease financing and import/export trade, asset-backed lending, agricultural finance, and other products. It also provides ancillary services comprising capital markets, treasury management, and receivable lock-box collection services to corporate and governmental entity customers. In addition, the company offers asset management and fiduciary services for individuals, estates, foundations, business corporations, and charitable organizations. Further, it provides investment and insurance products to its customers principally within its domestic markets, as well as fund administration services to mutual and other funds. Additionally, the company provides corporate and purchasing card, and corporate trust services. Furthermore, it offers trust and investment management, merchant and ATM processing, mortgage banking, insurance, and brokerage and leasing services. U.S. Bancorp was founded in 1863 and is headquartered in Minneapolis, Minnesota.
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.
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