Markets
BK

Why it's Better to Hold BNY Mellon (BK) in Your Portfolio

On Jun 22, 2017, we issued an updated research report on The Bank of New York Mellon CorporationBK . Efficient cost-saving initiatives, strong global presence and easing margin pressure position the company well for future growth. Moreover, with the passage of the Financial Choice Act, the company is likely to increase lending activities, thereby witnessing better revenues.

However, higher dependence on fee-based income as a source of revenue makes us a little apprehensive.

Notably, shares of the company have gained 30.4% in the last one year, underperforming the Zacks categorized Banks - Major Regional industry's rally of 41.3%.

In the last 30 days, the Zacks Consensus Estimate for the current year have remained stable. As a result, the stock carries a Zacks Rank #3 (Hold).

The company's cost-saving initiatives have been driving its bottom line. Non-interest expenses have declined at a CAGR of 7% over the last three years (2014-2016). Despite higher investment related expenses, the company remains well positioned to lower its overall cost.

Also, with improvement in interest rates, pressure on the company's net interest margin (NIM) has been gradually easing. Notably, management expects any further rate hike to positively impact margins as well as net interest revenue.

Stocks to Consider

A few better-ranked stocks from the same space worth considering include Comerica Incorporated CMA , KeyCorp KEY and M&T Bank Corporation MTB , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here .

Comerica witnessed a marginal upward earnings estimate revision for the current year in the last 60 days. Its share price increased 81.2% in the last one year.

KeyCorp's shares gained 68.1% in the last one year and its Zacks Consensus Estimate has remained stable for the current year in the last 60 days.

M&T Bank's earnings estimates were revised 1.1% upward for the current year in the last 60 days. Its share price increased nearly 44.5% in the last one year.

The Best & Worst of Zacks

Today you are invited to download the full, up-to-the-minute list of 220 Zacks Rank #1 "Strong Buys" free of charge. From 1988 through 2015 this list has averaged a stellar gain of +25% per year. Plus, you may download 220 Zacks Rank #5 "Strong Sells." Even though this list holds many stocks that seem to be solid, it has historically performed 6X worse than the market. See these critical buys and sells free >>

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

Comerica Incorporated (CMA): Free Stock Analysis Report

M&T Bank Corporation (MTB): Free Stock Analysis Report

KeyCorp (KEY): Free Stock Analysis Report

Bank Of New York Mellon Corporation (The) (BK): Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

In This Story

BK CMA KEY MTB

Other Topics

Stocks

Latest Markets Videos

    Zacks

    Zacks is the leading investment research firm focusing on stock research, analysis and recommendations. In 1978, our founder discovered the power of earnings estimate revisions to enable profitable investment decisions. Today, that discovery is still the heart of the Zacks Rank. A wealth of resources for individual investors is available at www.zacks.com.

    Learn More