Bank of New York Mellon Corp (BK)

(20 October 2016)

BK Business Summary

Bank of New York Mellon provides a comprehensive array of services that enable institutions and individuals to move and manage financial assets in more than 100 markets worldwide. The company specializes in institutional services, private banking and asset management. Key products include advisory and asset management services to support investment decision, trade execution, clearance and settlement capabilities, custody, securities lending, accounting, and administrative services for investment portfolios, sophisticated risk and performance measurement tools for analyzing portfolios, and services for issuers of equity and debt securities.

BK Fundamentals

  • Price to Earnings: 14.49
  • Earnings Per Share: $2.83
  • Market Cap: 42.1B
  • Current Ratio: N/A
  • Return on Equity: 8.29%
  • Dividend Yield: 1.65%
  • Debt to Capital: 35.6%

Income Statement ($ in Millions)

  • Investment Management fees YTD decreased $66.
  • Net Interest Revenue YTD increased $13.
  • Income before taxes decreased YTD $71, or 14%.
  • Average balances:
    • Average loans increased 21%, or $2,567.
    • Average deposits increased 5%, or $819.

Credit Ratings

  • Received ‘Stable’ credit ratings with all 4 trusted credit rating companies.

Cash Flow Statement ($ in Millions)

  • Net Cash provided by operating activities decreased $1,172.
  • Net Cash provided by investing activities increased $43,746.
  • Net Cash used for financing activities increased $44,535.

Balance Sheet ($ in Millions)

  • Total Assets decreased $3,985.
  • Total Liabilities decreased by $4,409.

Highlights from 10-Q

  • At June 30, 2016, we are potentially obligated to pay additional consideration that could amount to $29 million over the next three years for our acquired companies, based on contractual agreements. The acquisitions and disposition described below did not have a material impact on BNY Mellon’s results of operations. In April 2016, the Company acquired Tower Development Corporation (“TDC”), a portfolio of approximately 330 towers, for approximately $461 million in cash (“TDC Acquisition”). The Company funded the acquisition with cash on hand, cash from borrowings under the 2016 Revolver, and cash from equity issuances under the ATM Program (see note 10).
  • On April 1, 2016, BNY Mellon acquired the assets of Atherton Lane Advisers, LLC, a U.S.-based investment manager with approximately $2.45 billion in assets under management and servicer for approximately 700 high net worth clients, for cash of $38 million, plus contingent payments measured at $22 million.

Entry and Exit Points

Entry

  • $33

Exit

  • $45.

Double top at 45 in December ’15, has yet to test that same price target as of today.

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