Analyzing Ameriprise Financial (NYSE:AMP) & Bank of New York Mellon (NYSE:BNY)

Bank of New York Mellon (NYSE:BNY) and Ameriprise Financial (NYSE:AMP) are both large-cap finance companies, but which is the better investment? We will compare the two companies based on the strength of their earnings, valuation, institutional ownership, risk, profitability, analyst recommendations and dividends.

Volatility and Risk

Bank of New York Mellon has a beta of 1.05, meaning that its stock price is 5% more volatile than the S&P 500. Comparatively, Ameriprise Financial has a beta of 1.14, meaning that its stock price is 14% more volatile than the S&P 500.

Valuation and Earnings

This table compares Bank of New York Mellon and Ameriprise Financial”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Bank of New York Mellon	$40.76 billion	2.63	$5.55 billion	$8.59	18.39
Ameriprise Financial	$19.50 billion	2.57	$3.56 billion	$41.46	13.47

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Bank of New York Mellon	15.52%	16.00%	1.27%
Ameriprise Financial	20.24%	64.19%	2.15%

Institutional & Insider Ownership

85.3% of Bank of New York Mellon shares are held by institutional investors. Comparatively, 83.9% of Ameriprise Financial shares are held by institutional investors. 0.2% of Bank of New York Mellon shares are held by insiders. Comparatively, 0.6% of Ameriprise Financial shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Dividends

Bank of New York Mellon pays an annual dividend of $2.52 per share and has a dividend yield of 1.6%. Ameriprise Financial pays an annual dividend of $6.80 per share and has a dividend yield of 1.2%. Bank of New York Mellon pays out 29.3% of its earnings in the form of a dividend. Ameriprise Financial pays out 16.4% 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 increased its dividend for 14 consecutive years and Ameriprise Financial has increased its dividend for 21 consecutive years.

Analyst Recommendations

This is a summary of current ratings and price targets for Bank of New York Mellon and Ameriprise Financial, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Bank of New York Mellon	0	6	10	1	2.71
Ameriprise Financial	1	4	4	2	2.64

Bank of New York Mellon presently has a consensus price target of $157.13, indicating a potential downside of 0.53%. Ameriprise Financial has a consensus price target of $555.33, indicating a potential downside of 0.57%. Given Bank of New York Mellon’s stronger consensus rating and higher possible upside, research analysts clearly believe Bank of New York Mellon is more favorable than Ameriprise Financial.

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.

About Ameriprise Financial

Ameriprise Financial, Inc., together with its subsidiaries, provides various financial products and services to individual and institutional clients in the United States and internationally. It operates through four segments: Advice & Wealth Management, Asset Management, Retirement & Protection Solutions, and Corporate & Other. The Advice & Wealth Management segment provides financial planning and advice; brokerage products and services for retail and institutional clients; discretionary and non-discretionary investment advisory accounts; mutual funds; insurance and annuities products; cash management and banking products; and face-amount certificates. The Asset Management segment offers investment management, advice, and products to retail, high net worth, and institutional clients through third-party financial institutions, advisor networks, direct retail, and its institutional sales force under the Columbia Threadneedle Investments brand name. This segment products include U.S. mutual funds and their non-U.S. equivalents, exchange-traded funds, variable product funds underlying insurance, and annuity separate accounts; and institutional asset management products, such as traditional asset classes, separately managed accounts, individually managed accounts, collateralized loan obligations, hedge funds, collective funds, and property and infrastructure funds. The Retirement & Protection Solutions segment provides variable annuity products, as well as life and disability income insurance products to retail clients. The company was formerly known as American Express Financial Corporation and changed its name to Ameriprise Financial, Inc. in September 2005. Ameriprise Financial, Inc. was founded in 1894 and is headquartered in Minneapolis, Minnesota.