This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

5 Bank Stocks Bernanke Can't Hurt Anymore

2. Bank of New York Mellon
Shares of Bank of New York Mellon (BK) closed at $23.71 Monday, returning 21% year-to-date, following a 33% decline during 2011.

The shares trade for 2.3 times tangible book value, and for 10 times the consensus 2013 EPS estimate of $2.40. The consensus 2012 EPS estimate is $2.06.

Based on a quarterly payout of 13 cents, the shares have a dividend yield of 2.19%.

Bank of New York Mellon reported second-quarter net income applicable to common shareholders of $466 million, or 39 cents a share, including a litigation charge of $212 after tax, or 18 cents a share. Excluding the litigation charge, second-quarter operating earnings were 57 cents a share.

In comparison, the company reported earnings applicable to common shareholders of $619 million, or 52 cents a share, in the first quarter, and $735 million, or 59 cents a share, during the second quarter of 2011.

The company's second-quarter return on tangible common equity was 15.7%, declining from 21.0% the previous quarter, and 26.3% a year earlier.

Bank of New York Mellon's second-quarter net interest margin was 1.25%, narrowing from 1.32% in the first quarter, and 1.41% in the second quarter of 2011. Net interest income made up 20% of total second-quarter revenue.

Mosby estimates that the company will see its net interest margin contract by another three basis points through the end of 2013.

The analyst rates Bank of New York Mellon a "Buy," and on Monday raised his price target for the shares by a dollar, to $29, and said "We expect BK to earn a 22% return on tangible common equity in 2013 with an estimated cost of equity around 11%."

Mosby said that "while BK currently trades at a 142% premium to its 2012 year-end tangible book value as compared to an average 105% premium for the Trust Banks, our analysis suggests that BK's fundamental strength should warrant approximately a 165% premium," and also highlighted "WFC and BK as two Large Cap Banks that we believe still have significantly more upside potential with less than 20% downside risk if market perception begins to turn unfavorable again."

BK Chart BK data by YCharts

Interested in more on Bank of New York Mellon? See TheStreet Ratings' report card for this stock.
6 of 7

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
BAC $11.95 0.00%
C $37.54 0.00%
JPM $57.49 0.00%
RF $7.60 0.00%
WFC $47.31 0.00%


Chart of I:DJI
DOW 15,973.84 +313.66 2.00%
S&P 500 1,864.78 +35.70 1.95%
NASDAQ 4,337.5120 +70.6750 1.66%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs