Yahoo Finance Bank of New York Mellon Corp's Dividend Analysis
Assessing the Sustainability of BK's Dividend Payments
Bank of New York Mellon Corp (NYSE:BK) recently announced a dividend of $0.42 per share, payable on 2024-05-09, with the ex-dividend date set for 2024-04-25. As investors look forward to this upcoming payment, the spotlight also shines on the company's dividend history, yield, and growth rates. Using the data from GuruFocus, let's look into Bank of New York Mellon Corp's dividend performance and assess its sustainability.
What Does Bank of New York Mellon Corp Do?
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BNY Mellon is a global investment company involved in managing and servicing financial assets throughout the investment lifecycle. The bank provides financial services for institutions, corporations, and individual investors and delivers investment management and investment services in 35 countries and more than 100 markets. BNY Mellon is the largest global custody bank in the world, with $47.8 trillion in under custody or administration (as of Dec. 31, 2023), and can act as a single point of contact for clients looking to create, trade, hold, manage, service, distribute, or restructure investments. BNY Mellon's asset-management division manages about $2.0 trillion in assets.
A Glimpse at Bank of New York Mellon Corp's Dividend History
Bank of New York Mellon Corp has maintained a consistent dividend payment record since 1985. Dividends are currently distributed on a quarterly basis. Bank of New York Mellon Corp has increased its dividend each year since 2010. The stock is thus listed as a dividend achiever, an honor that is given to companies that have increased their dividend each year for at least the past 14 years. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Bank of New York Mellon Corp's Dividend Yield and Growth
As of today, Bank of New York Mellon Corp currently has a 12-month trailing dividend yield of 2.83% and a 12-month forward dividend yield of 2.93%. This suggests an expectation of increased dividend payments over the next 12 months.
Over the past three years, Bank of New York Mellon Corp's annual dividend growth rate was 8.40%. Extended to a five-year horizon, this rate decreased to 8.00% per year. And over the past decade, Bank of New York Mellon Corp's annual dividends per share growth rate stands at an impressive 10.90%.
Based on Bank of New York Mellon Corp's dividend yield and five-year growth rate, the 5-year yield on cost of Bank of New York Mellon Corp stock as of today is approximately 4.16%.
The Sustainability Question: Payout Ratio and Profitability
To assess the sustainability of the dividend, one needs to evaluate the company's payout ratio. The dividend payout ratio provides insights into the portion of earnings the company distributes as dividends. A lower ratio suggests that the company retains a significant part of its earnings, thereby ensuring the availability of funds for future growth and unexpected downturns. As of 2024-03-31, Bank of New York Mellon Corp's dividend payout ratio is 0.31.
Bank of New York Mellon Corp's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Bank of New York Mellon Corp's profitability 6 out of 10 as of 2024-03-31, suggesting fair profitability. The company has reported positive net income for each of year over the past decade, further solidifying its high profitability.
Growth Metrics: The Future Outlook
To ensure the sustainability of dividends, a company must have robust growth metrics. Bank of New York Mellon Corp's growth rank of 6 out of 10 suggests that the company has a fair growth outlook.
Revenue is the lifeblood of any company, and Bank of New York Mellon Corp's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Bank of New York Mellon Corp's revenue has increased by approximately 8.20% per year on average, a rate that outperforms approximately 51.32% of global competitors.
The company's 3-year EPS growth rate showcases its capability to grow its earnings, a critical component for sustaining dividends in the long run. During the past three years, Bank of New York Mellon Corp's earnings increased by approximately 9.70% per year on average, a rate that outperforms approximately 52.62% of global competitors.
Lastly, the company's 5-year EBITDA growth rate of 2.10%, which outperforms approximately 39.83% of global competitors.
Concluding Thoughts on Bank of New York Mellon Corp's Dividend Profile
In conclusion, Bank of New York Mellon Corp's consistent dividend payments, robust dividend growth rate, manageable payout ratio, and fair profitability and growth metrics position it as a potentially attractive option for value investors focused on income-generating stocks. While past performance is reassuring, investors must also consider the company's future prospects in a dynamic financial landscape. Will Bank of New York Mellon Corp continue its trajectory of dividend growth, and how will market conditions affect its ability to sustain these payments? These are critical questions for investors to ponder as they assess the company's place in their portfolios.
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This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
This article first appeared on GuruFocus.
