Safeguard Scientifics (NYSE: SFE) and Bank Of New York Mellon Corporation (The) (NYSE:BK) are both finance companies, but which is the better business? We will contrast the two businesses based on the strength of their dividends, risk, profitability, institutional ownership, valuation, earnings and analyst recommendations.

Volatility and Risk

Safeguard Scientifics has a beta of 1.3, meaning that its share price is 30% more volatile than the S&P 500. Comparatively, Bank Of New York Mellon Corporation (The) has a beta of 1.14, meaning that its share price is 14% more volatile than the S&P 500.

Earnings & Valuation

This table compares Safeguard Scientifics and Bank Of New York Mellon Corporation (The)’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Safeguard Scientifics N/A N/A -$17.72 million ($4.76) -2.65
Bank Of New York Mellon Corporation (The) $15.55 billion 3.35 $3.49 billion $3.38 14.92

Bank Of New York Mellon Corporation (The) has higher revenue and earnings than Safeguard Scientifics. Safeguard Scientifics is trading at a lower price-to-earnings ratio than Bank Of New York Mellon Corporation (The), indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a breakdown of recent ratings for Safeguard Scientifics and Bank Of New York Mellon Corporation (The), as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Safeguard Scientifics 0 0 0 0 N/A
Bank Of New York Mellon Corporation (The) 2 8 3 2 2.33

Bank Of New York Mellon Corporation (The) has a consensus target price of $53.43, indicating a potential upside of 5.95%. Given Bank Of New York Mellon Corporation (The)’s higher possible upside, analysts clearly believe Bank Of New York Mellon Corporation (The) is more favorable than Safeguard Scientifics.

Dividends

Bank Of New York Mellon Corporation (The) pays an annual dividend of $0.96 per share and has a dividend yield of 1.9%. Safeguard Scientifics does not pay a dividend. Bank Of New York Mellon Corporation (The) pays out 28.4% of its earnings in the form of a dividend. Bank Of New York Mellon Corporation (The) has increased its dividend for 4 consecutive years.

Insider & Institutional Ownership

77.6% of Safeguard Scientifics shares are owned by institutional investors. Comparatively, 81.8% of Bank Of New York Mellon Corporation (The) shares are owned by institutional investors. 2.7% of Safeguard Scientifics shares are owned by insiders. Comparatively, 3.6% of Bank Of New York Mellon Corporation (The) shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Profitability

This table compares Safeguard Scientifics and Bank Of New York Mellon Corporation (The)’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Safeguard Scientifics N/A -61.90% -42.77%
Bank Of New York Mellon Corporation (The) 23.35% 10.35% 1.07%

Summary

Bank Of New York Mellon Corporation (The) beats Safeguard Scientifics on 13 of the 15 factors compared between the two stocks.

About Safeguard Scientifics

Safeguard Scientifics, Inc. is engaged in providing capital to technology companies within the fields of healthcare, financial services and digital media. The Company holds interest in companies, which it refers to as partner companies. As of December 31, 2016, the Company held interests in 29 non-consolidated partner companies. The Company offers operational and management support to each of its partner companies. In addition to management and operational support, the Company offers ongoing planning and development assessment. It provides mentoring, advice and guidance to develop partner company management. The Company serves on the boards of directors of its partner companies, working with them to develop and implement strategic and operating plans. It measures and monitors achievement of these plans through regular review of operational and financial performance measurements.

About Bank Of New York Mellon Corporation (The)

The Bank of New York Mellon Corporation is an investments company. The Company operates businesses through two segments: Investment Management and Investment Services. The Company also has an Other segment, which includes the leasing portfolio, corporate treasury activities (including its investment securities portfolio), derivatives and other trading, corporate and bank-owned life insurance and renewable energy investments, and business exits. As of December 31, 2016, the Company had $29.9 trillion in assets under custody and/or administration and $1.6 trillion in assets under management. The Company’s Investment Management boutiques offer a range of actively managed equity, fixed income, alternative and liability-driven investments, along with passive products and cash management. The Company offers asset servicing, clearing services, issuer services and treasury services to its clients.

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