Critical Analysis: Bank of New York Mellon (NYSE:BNY) & U.S. Global Investors (NASDAQ:GROW)

U.S. Global Investors (NASDAQ:GROW) and Bank of New York Mellon (NYSE:BNY) are both finance companies, but which is the better stock? We will compare the two companies based on the strength of their dividends, institutional ownership, earnings, profitability, analyst recommendations, risk and valuation.

Valuation and Earnings

This table compares U.S. Global Investors and Bank of New York Mellon”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
U.S. Global Investors	$10.25 million	3.13	$3.06 million	$0.25	10.44
Bank of New York Mellon	$40.76 billion	2.40	$5.55 billion	$9.05	15.91

Bank of New York Mellon has higher revenue and earnings than U.S. Global Investors. U.S. Global Investors 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.

Profitability

This table compares U.S. Global Investors 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. Global Investors	29.81%	6.70%	6.30%
Bank of New York Mellon	16.32%	16.57%	1.29%

Volatility and Risk

U.S. Global Investors has a beta of 0.67, suggesting that its share price is 33% less volatile than the S&P 500. Comparatively, Bank of New York Mellon has a beta of 1.06, suggesting that its share price is 6% more volatile than the S&P 500.

Dividends

U.S. Global Investors pays an annual dividend of $0.09 per share and has a dividend yield of 3.4%. Bank of New York Mellon pays an annual dividend of $2.52 per share and has a dividend yield of 1.8%. U.S. Global Investors pays out 36.0% of its earnings in the form of a dividend. Bank of New York Mellon pays out 27.8% 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. Bank of New York Mellon has raised its dividend for 14 consecutive years.

Analyst Ratings

This is a breakdown of current ratings and recommmendations for U.S. Global Investors and Bank of New York Mellon, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
U.S. Global Investors	0	1	0	0	2.00
Bank of New York Mellon	0	6	7	1	2.64

Bank of New York Mellon has a consensus price target of $164.62, suggesting a potential upside of 14.35%. Given Bank of New York Mellon’s stronger consensus rating and higher possible upside, analysts clearly believe Bank of New York Mellon is more favorable than U.S. Global Investors.

Insider & Institutional Ownership

23.6% of U.S. Global Investors shares are held by institutional investors. Comparatively, 85.3% of Bank of New York Mellon shares are held by institutional investors. 19.2% of U.S. Global Investors shares are held by company insiders. Comparatively, 0.2% of Bank of New York Mellon shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Summary

Bank of New York Mellon beats U.S. Global Investors on 13 of the 18 factors compared between the two stocks.

About U.S. Global Investors

U.S. Global Investors, Inc. is a publicly owned investment manager. It primarily provides its services to investment companies. The firm is a large advisory firm, an investment adviser to an investment company which provides portfolio management for investment companies. The firm manages and launches equity/balanced funds, fixed income funds and other funds. It also manages hedge funds. The firm primarily invests in no-load mutual funds and exchange traded funds (ETFs). U.S. Global Investors, Inc. is based in San Antonio, Texas.

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.