Bank Of New York Mellon Corporation (The) (NYSE: BK) and Fortress Investment Group (NYSE:FIG) are both mid-cap finance companies, but which is the better investment? We will contrast the two businesses based on the strength of their institutional ownership, profitability, earnings, valuation, risk, dividends and analyst recommendations.

Dividends

Bank Of New York Mellon Corporation (The) pays an annual dividend of $0.96 per share and has a dividend yield of 1.9%. Fortress Investment Group pays an annual dividend of $0.36 per share and has a dividend yield of 4.5%. Bank Of New York Mellon Corporation (The) pays out 28.4% of its earnings in the form of a dividend. Fortress Investment Group pays out 81.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Fortress Investment Group has raised its dividend for 4 consecutive years. Fortress Investment Group is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Risk & Volatility

Bank Of New York Mellon Corporation (The) has a beta of 1.14, indicating that its stock price is 14% more volatile than the S&P 500. Comparatively, Fortress Investment Group has a beta of 1.95, indicating that its stock price is 95% more volatile than the S&P 500.

Institutional & Insider Ownership

81.8% of Bank Of New York Mellon Corporation (The) shares are owned by institutional investors. Comparatively, 40.2% of Fortress Investment Group shares are owned by institutional investors. 3.6% of Bank Of New York Mellon Corporation (The) shares are owned by company insiders. Comparatively, 45.2% of Fortress Investment Group shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Profitability

This table compares Bank Of New York Mellon Corporation (The) and Fortress Investment Group’s 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%
Fortress Investment Group 10.61% 38.79% 15.58%

Valuation & Earnings

This table compares Bank Of New York Mellon Corporation (The) and Fortress Investment Group’s 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 3.43 $3.49 billion $3.38 15.25
Fortress Investment Group $950.66 million 1.84 $273.52 million $0.44 18.11

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

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for Bank Of New York Mellon Corporation (The) and Fortress Investment Group, 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
Fortress Investment Group 0 4 0 0 2.00

Bank Of New York Mellon Corporation (The) presently has a consensus target price of $53.71, indicating a potential upside of 4.18%. Fortress Investment Group has a consensus target price of $6.00, indicating a potential downside of 24.72%. Given Bank Of New York Mellon Corporation (The)’s stronger consensus rating and higher possible upside, equities analysts plainly believe Bank Of New York Mellon Corporation (The) is more favorable than Fortress Investment Group.

Summary

Bank Of New York Mellon Corporation (The) beats Fortress Investment Group on 12 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.

Fortress Investment Group Company Profile

Fortress Investment Group LLC (Fortress) is an investment management firm. The Company operates through segments, including private equity funds, permanent capital vehicles, credit hedge funds, credit PE funds, liquid hedge funds and Logan Circle. Its business is to sponsor the formation of, and provide investment management services for, various investment funds, permanent capital vehicles and related managed accounts (the Fortress Funds). Fortress’s sources of income from the Fortress Funds are management fees, incentive income and investment income on its investments in the funds. As of December 31, 2016, the Company’s private equity business manages approximately $13.5 billion of assets under management (AUM); credit funds business manages approximately $18.1 billion of AUM; liquid hedge funds business manages over $4.6 billion of AUM, and Logan Circle business manages approximately $33.4 billion of AUM.

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