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Bank Of New York Mellon Corp Stock Buy Recommendation Reiterated (BK)

Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.

NEW YORK ( TheStreet) -- Bank of New York Mellon (NYSE: BK) has been reiterated by TheStreet Ratings as a buy with a ratings score of B . The company's strengths can be seen in multiple areas, such as its solid stock price performance, growth in earnings per share, revenue growth, attractive valuation levels and expanding profit margins. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity.

  • EXCLUSIVE OFFER: Jim Cramer's Protégé, Dave Peltier, only buys Stocks Under $10 that he thinks could potentially double. See what he's trading today with a 14-day FREE pass

Highlights from the ratings report include:

  • Looking at where the stock is today compared to one year ago, we find that it is not only higher, but it has also clearly outperformed the rise in the S&P 500 over the same period. Although other factors naturally played a role, the company's strong earnings growth was key. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
  • BANK OF NEW YORK MELLON CORP has improved earnings per share by 26.2% in the most recent quarter compared to the same quarter a year ago. Stable earnings per share over the past year indicate the company has sound management over its earnings and share float. We anticipate these figures will begin to experience more growth in the coming year. During the past fiscal year, BANK OF NEW YORK MELLON CORP increased its bottom line by earning $2.05 versus $2.04 in the prior year. This year, the market expects an improvement in earnings ($2.30 versus $2.05).
  • Despite its growing revenue, the company underperformed as compared with the industry average of 9.8%. Since the same quarter one year prior, revenues slightly increased by 4.1%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • The gross profit margin for BANK OF NEW YORK MELLON CORP is currently very high, coming in at 98.50%. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 17.00% trails the industry average.

The Bank of New York Mellon Corporation provides various financial products and services worldwide. It operates through Investment Management, Investment Services, and Other segments. Bank of New York Mellon has a market cap of $33.51 billion and is part of the financial sector and financial services industry. The company has a P/E ratio of 14.2, below the S&P 500 P/E ratio of 17.7. Shares are up 10.4% year to date as of the close of trading on Monday.

You can view the full Bank of New York Mellon Ratings Report or get investment ideas from our investment research center.

--Written by a member of TheStreet Ratings Staff.

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