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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
The Bank Of New York Mellon Corporation (XNYS:BK) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
BK
Name:
THE BANK OF NEW YORK MELLON CORPORATION (XNYS:BK)
Sector:
3.16B
Industry:
Asset Management
CEO:
Mr. Thomas Gibbons
Total Employees:
50,800
Our Technological Advancement Rating
Our Rating:
D
Technological advancement compared to industry is -149.80% lower
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF THE BANK OF NEW YORK MELLON CORPORATION(BK) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND ASSET MANAGEMENT INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
41.12
One Month Price Target:
$41.37
Six Month Price Target :
$42.64
Likely Price in One Year's Time:
Ticker:
$44.16
Likely Trading Range Today Under (Normal Volatility)
$40.96
Price Upper limit ($) :
$41.28
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$39.15
This week:
$36.72
This month :
$32.31
Other Primary facts
Market Cap:
33.25B
Market Cap Classification:
Large Cap
Number of Shares
IPO Date:
808.10M
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
15.62%
-14.5%
Worst Daily Decline:
Our Options Trading Entry Points
Iron Condor entry points for options expiring in 1 week's time
Low risk (<2%) entry points
Buy Call:
Sell Call:
Buy Put:
Sell Put:
$50.26
$46.11
$31.98
$36.13
Medium risk (<10%) entry points
Buy Call
Sell Call
$44.76
Buy Put:
Sell Put:
$43.87
$37.47
$38.37
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
BK
Sharpe Ratio:
-0.42%
Comparison:
BK, is amongst the top 40% stocks with lowest risk-adjusted returns
Sharpe ratio is -151.97% lower than the industry
& is -118.33% lower than the market/S&P 500 average
Average Returns/Yield of
BK
Daily returns:
0.00%
Weekly returns:
0.00%
Monthly returns:
-0.02%
Yearly returns:
9.18%
Comparison of returns:
Average annual returns/yield (last 3 years) is -102.34% below industry average
Classification:
BK, is amongst the top 40% lowest yielding stocks in terms of daily returns
Results of T-Test of Returns:
1
Statistical test of Returns:
BK has yielded returns statistically similar to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
2.33%
Weekly Volatility:
5.21%
Monthly Volatility:
10.43%
Yearly Volatility:
36.12%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
0.16%
Volatility in last five trading days has been -93.14% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-4.79%
Weekly VaR:
-10.71%
Monthly VaR:
-21.42%
How Much Can the price of
BK
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-19%
Worst case (decline):
-74.19%
This translates to price declining to:
$33.33
This translates to price declining to:
$10.61
Severe Crash Probability
Risk of crash in next 6/12 months: Low (<25%)
What is Value at Risk (VaR)?
Risk Fundamentals
BK is a 51.15% riskier investment compared to the market/S&P 500 & is 29.49% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is -10.29% below industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
BK
Beta in relation to market/S&P 500--1.10
Expected beta in 1 year's time:
0.741
Expected beta in 3 year's time:
1.047
Unlevered (debt free) Beta:
0.733
Beta in relation to Nasdaq (XNAS):
0.722
Beta in relation to all global stocks::
0.815
Beta Comparison & Analysis
Beta of competitors/peers::
1.245
Beta is -11.73% lower than peers
Average Industry Beta:
1.694
Beta is -35.13% below industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
5.96%
Sustainable growth rate is -78.86% below industry average
Alpha provided | Alpha Analysis
Alpha provided:
-0.109
Alpha is 95.48% above industry average alpha yield
Alpha is -693% below the market average
Analysis of Cost of Capital of
BK
Equity cost of capital:
0.107
Equity cost of capital is -27.63% below industry mean WACC
Unlevered (without debt) cost of capital:
7.12%
Before-tax cost of debt:
0.88%
After-tax cost of debt:
0.69%
Overall debt rating:
Highest AAA investment grade
Weighted average cost of capital (WACC):
0.69%
WACC is 37.60% above industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$19.35
Revenue growth rate per share of (3Y):
0.79
Annual revenue growth rate is -84.13% below industry average
EPS:
$4.04
Expected Annual growth rate of EPS (3Y):
-2.88%
Expected future EPS growth rate is -110.36% lower than the Asset Management industry
Free cash flow (FCF) per share:
$9.93
Balance sheet equity growth per share: 25.80%
Equity growth rate per share is 22.09% higher than the industry
Debt per share
$31.63
EBITDA per share
$8.01
Valuation Analysis Today of
BK
P/E Ratio:
10.46
P/E Ratio of Competitors/Peers:
15.7
P/E ratio is -33.33% lower than main peers & is -35.20% lower than the industry
Stock price/value with industry average P/E ratio: $65.24
BK is -36.97% undervalued if valued using industry average P/E ratio
Share value as per dividend discount (DDM) model: $27.35
Present value of the expected future dividends only: $14.14
P/S (Price to Sales ratio):
2.13
Price to sales ratio is -68.98% below the industry mean
P/B (Price to book value ratio):
0.79
Price to free cash flow: 4.14
-
Net income growth rate (3Y):
2.30%
Net income growth rate is -98.42% lower than the industry average net income growth rate
Dividend Analysis
Dividend payout rate: 9.76%
Dividend yeild: 3.31%
Previous Dividend: $0.34
Previous adjusted dividend: $0.34
Previous Dividend: $1.36
Expected next dividend best case: $0.35
Expected next dividend worst case: $0.33
Average dividend payment (long-term): $0.32
Average dividend increase/decrease (growth rate) % per period: 0.97%
Expected next dividend payment date: 08/09/2022
Expected next dividend record date: 27/07/2022
Expected next dividend declaration date: 18/07/2022
Previous dividend payment date: 05/11/2022
Previous dividend record date: 28/04/2022
Previous dividend declaration date: 18/04/2022
Dividend History:
2022-04-27--$0.34
2021-10-29--$0.34
2021-04-27--$0.31
2022-01-28--$0.34
2021-07-26--$0.34
2021-01-29--$0.31
Dividend growth rate is -82.43% lower than the industry average
In-depth Debt & Leverage Analysis
Debt to equity ratio:
61.15%
Net debt to equity ratio:
-321.88%
Debt to assets ratio:
5.39%
Net debt to assets ratio:
-28.40%
Debt-to-asset ratio is -89.68% below industry average
Ability to repay debt:
Interest coverage ratio:
28.91
Interest coverage ratio is -51.38% less than industry average
Looking forward:
Debt growth rate:
-6.90%
Annual debt growth is 0% lower than industry average debt growth rate
Debt repayment rate in last quarter: 4.66%
Analysis of Key Statistics
Correlation of price movement with the market:
0.708
Statistical significance of correlation:
BK has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.576
Stock price is 22.95% more correlated with the market, compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.576
Correlation of price movement with Nasdaq (^IXIC):
0.031
Covariance of price movement with the market:
0.042
Kurtosis
8.744
Returns have a significant fat-tails (leptokurtic), i.e., returns considerably higher or lower than the mean returns are more probable, compared to assets with normally distributed returns
Skewness of returns:
0.01
Returns are, approximately, symmetrical
Fundamental Analysis & Dupont Analysis of
BK
Gross Profit Margin Ratio:
-
Operating Profit Margin Ratio:
0.00%
-
Net Profit Margin Ratio:
-
Effective Tax Rate:
18.33%
Effective tax rate is -24.93% lower than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
8.62%
Return on equity (ROE) is -65.88% lower than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
0.76%
Return on assets (ROA) is -86.96% lower than the industry
Financial Leverage:
1.1x
Current Ratio:
0
-
Cash Conversion Cycle (days):
-22295.7
Cash conversion cycle is -2666.76% below industry average
The remaining useful life of property plant & equipment is: 4.1 years
Stock based compensation to net income ratio:
-
In-depth Efficiency Analysis
Revenue generated per employee:
307.7K
Each employee generates -78% less revenue than industry average revenue per employee
EBITDA generated per employee:
127.5K
Each employee generates -117% less EBITDA than industry average revenue per employee
Profit generated per employee:
71.0K
Each employee generates -106% less net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
62.2K
Each employee generates -152% less free cash flow than industry average revenue per employee
Assets/Capital per employee
3.9M
Each employee generates -152% less free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
-
-
Competitors/Peer firms of
BK
SCHW-PD
AEB
LLOYDS BANKING GROUP PLC (XNYS:LYG)
Sumitomo Mitsui Financial Group, Inc. (XNYS:SMFG)
PRUDENTIAL PUBLIC LIMITED COMPANY (XNYS:PUK)
BARCLAYS PLC (XNYS:BCS)
COLUMBUS MCKINNON CORPORATION (XNAS:CMCO)
ING Groep NV (XNYS:ING)
METLIFE, INC. (XNYS:MET)
Current Analyst Ratings
Strong buy�4%
Buy�21%
Hold�50%
Sell�8%
Strong sell�0%
Overall analyst sentiment is: Hold
Income Statement
Period:
TTM
Date:
3/31/22
Revenue:
15.63B
Cost of Revenue:
Gross Profit:
R&D Expense
General & Admin Expenses:
Selling, General & Admin Expenses
Sales and Marketing Expenses
Other Expenses :
Operating Expenses :
Cost & Expenses :
Interest Income:
Interest Expenses:
Depreciation & Amortization:
EBITDA:
Operating Income:
Other Income Expenses:
Income Before Tax:
Income Tax Expense:
Net Income:
Balance Sheet
Date:
Calendar Year:
Period:
Cash & Cash Equivalents:
Short Term Investments:
Cash & Short Term Investments:
Net Receivables:
Inventory:
Other Current Assets:
Total Current Assets:
PP&E:
Goodwill:
Intangible Assets:
Long Term Investments:
Tax Assets:
Other Non-Current Assets:
Total Non-Current Assets:
Other Assets:
Total Assets:
Accounts Payable:
Short Term Debt:
Tax Payables:
Deferred Revenue:
Other Current Liabilities:
Total Current Liabilities:
Long Term Debt:
Other Non-Current Liabilities:
Total Non Current Liabilities:
Other Liabilities:
Total Liabilities:
Common Stock:
Retained Earnings:
Accumulated Other Comprehensive Loss:
Other Total Stockholders' Equity:
Total Stockholders' Equity:
Total Liabilities and Stockholders' Equity:
Total Investments:
Total Debt:
Net Debt:
-
-
-
6.44B
6.44B
-
-
-
2.89B
224.00M
1.84B
6.48B
-
3.61B
4.41B
809.00M
3.61B
Statement of Cash Flow
Date:
Period:
437.00M
Differed Income Tax :
36.00M
Stock Based Compensation :
-
Change in Working Capital :
2.19B
Accounts Receivables:
-
Other Working Capital:
2.19B
Other Non-Cash Items:
- 3000.00K
Net Cash Provided by Operating Activities:
3.43B
Investments in PP&E:
- 271000.00K
Net Acquisitions:
-
Purchases of Investments:
- 12209000.00K
Sales/Maturities of Investments:
Other Investing Activities:
Net Cash Used for Investing Activities:
Debt Repayment:
Common Stock Issued:
Common Stock Repurchased:
Dividend Paid:
Other Financing Activities:
Net Cash Used Provided by Financing Activities:
Effect of FOREX on Changes in Cash:
Net Changes in Cash:
Cash at End of Period:
Cash at Beginning of Period:
Operating Cash Flow:
Capital Expenditure:
Free Cash Flow (FCF):
3/31/22
2022
Q1
160.10B
40.02B
200.12B
5.90B
-
-
-
3.36B
17.46B
5.08B
170.32B
-
-
196.23B
670.04B
473.81B
26.61B
-
4.53B
-
-
-
25.56B
-
25.56B
457.22B
431.66B
14.00M
37.09B
- 3881000.0K
3.74B
March 31, 2022 at 6:00:00 AM
-
41.80B
473.46B
210.34B
25.56B
- 134544000.0K
13.97B
- 35391000.00K
- 33901000.00K
- 1250000.00K
130.00M
- 118000.00K
- 352000.00K
31.69B
30.10B
38.00M
- 339000.00K
9.54B
9.88B
3.43B
- 271000.00K
3.16B
Our Proprietary Portfolio Rating
Our Rating:
A+
Price Forecast/Expected Price in Next 5 Years of
BK
2023
2024
2025
2026
2027
$53.26
$57.19
$61.42
$65.95
$70.83