Comparing Truist Financial (NYSE:TFC) & Bank of New York Mellon (NYSE:BK)

Truist Financial (NYSE:TFC) and Bank of New York Mellon (NYSE:BK) are both large-cap finance companies, but which is the superior investment? We will contrast the two businesses based on the strength of their institutional ownership, dividends, analyst recommendations, profitability, risk, earnings and valuation.

Dividends

Truist Financial pays an annual dividend of $2.08 per share and has a dividend yield of 4.6%. Bank of New York Mellon pays an annual dividend of $1.88 per share and has a dividend yield of 2.0%. Truist Financial pays out 61.4% of its earnings in the form of a dividend. Bank of New York Mellon pays out 30.6% 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.

Valuation and Earnings

This table compares Truist Financial and Bank of New York Mellon”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Truist Financial	$24.25 billion	2.44	$4.82 billion	$3.39	13.34
Bank of New York Mellon	$18.51 billion	3.55	$4.53 billion	$6.14	14.97

Truist Financial has higher revenue and earnings than Bank of New York Mellon. Truist Financial 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.

Volatility & Risk

Truist Financial has a beta of 0.85, indicating that its stock price is 15% less volatile than the S&P 500. Comparatively, Bank of New York Mellon has a beta of 1.07, indicating that its stock price is 7% more volatile than the S&P 500.

Profitability

This table compares Truist Financial and Bank of New York Mellon’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Truist Financial	15.59%	8.96%	0.99%
Bank of New York Mellon	11.78%	12.96%	1.14%

Analyst Recommendations

This is a summary of recent ratings for Truist Financial and Bank of New York Mellon, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Truist Financial	0	7	12	2	2.76
Bank of New York Mellon	0	6	8	0	2.57

Truist Financial presently has a consensus target price of $48.44, suggesting a potential upside of 7.11%. Bank of New York Mellon has a consensus target price of $92.08, suggesting a potential upside of 0.16%. Given Truist Financial’s stronger consensus rating and higher possible upside, analysts clearly believe Truist Financial is more favorable than Bank of New York Mellon.

Institutional & Insider Ownership

71.3% of Truist Financial shares are held by institutional investors. Comparatively, 85.3% of Bank of New York Mellon shares are held by institutional investors. 0.2% of Truist Financial shares are held by insiders. Comparatively, 0.1% of Bank of New York Mellon shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

About Truist Financial

Truist Financial Corporation, a financial services company, provides banking and trust services in the Southeastern and Mid-Atlantic United States. The company operates through three segments: Consumer Banking and Wealth, Corporate and Commercial Banking, and Insurance Holdings.Its deposit products include noninterest-bearing checking, interest-bearing checking, savings, and money market deposit accounts, as well as certificates of deposit and individual retirement accounts. The company also provides funding; asset management; automobile lending; credit card lending; consumer finance; home equity and mortgage lending; other direct retail lending; insurance; investment brokerage; mobile/online banking; payment solutions; point-of-sale lending; retail and small business deposit products; small business lending; and wealth management/private banking services. In addition, it offers asset based lending, investment banking and capital market, institutional trust, insurance premium finance, derivatives, commercial lending, international banking, leasing, merchant, commercial deposit and treasury, floor plan, mortgage warehouse lending, real estate lending, and supply chain financing services. Further, the company provides insurance brokerage, retail and wholesale brokerage, securities underwriting and market making, loan syndication, and investment management and advisory services. The company was formerly known as BB&T Corporation and changed its name to Truist Financial Corporation in December 2019. Truist Financial Corporation was founded in 1872 and is headquartered in Charlotte, North Carolina.

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.