Bank of New York MellonBK43,14 $
BK is a colossal financial institution, serving 72% Fortune companies 500. According to the company's detailed presentation, its revenue is divided into the following segments:
- Services in the securities market — 45%. This is mainly the maintenance of assets and all sorts of services such as escrow accounts.. Segment pre-tax profit margin - 20,83% from its proceeds.
- Market and Welfare Services — 30%. These are clearing operations, treasury services. Segment pre-tax profit margin - 44,68% from its proceeds.
- Investments and Wealth Management - 25%. The title fully explains, what do they do in the segment. Segment pre-tax profit margin - 30% from its proceeds.
You can't tell by the name of the company., but it works not only in New York. According to the company's annual report, by region, its revenue is divided as follows:
- USA - 62,29%. Final segment margin — 19,88% from its proceeds.
- Europe, Middle East and Africa - 25,85%. Final segment margin — 24,39% from its proceeds.
- Asian-Pacific area - 7,18%. Final segment margin — 38,89% from its proceeds.
- Other, unnamed regions — 4,68%. Final segment margin — 46,77% from its proceeds.
Arguments in favor of the company
Dividends. The company pays 1,36 $ per share per year, what gives 3,04% per annum. Considering its stability, propensity to please shareholders and generally meet the requirements of capital regulators, i would expect, that investors will soon fly into its shares, loving passive income. For, considering all these points, The company's dividends are very high..
How does a company spend money on shareholders?
| 2017 | 2018 | 2019 | 2020 | 2021 | |
|---|---|---|---|---|---|
| Share buyback volume, million dollars | 2686 | 3269 | 3327 | 989 | 4567 |
| Dividend payments, million dollars | 901 | 1052 | 1120 | 1117 | 1126 |
| Number of shares, million | 1013 | 960 | 901 | 887 | 804 |
| Dividend per share | 0,86 $ | 1,04 $ | 1,18 $ | 1,24 $ | 1,30 $ |
| Total payout ratio | 92% | 105% | 104% | 62% | 160% |
| Dividend payout ratio | 23% | 26% | 26% | 33% | 32% |
Price. When comparing BK with other similar organizations, she doesn't look overrated. For some reason, it even looks like a more interesting investment..
It seems to me, this moment will also contribute to the growth of the attractiveness of the company's shares in the eyes of investors.
Furthermore, it may well try to buy someone bigger. Unlikely, that the deal will take place, - quicker, monopoly regulators will cut her down. But in any case, this asset looks very interesting against the general background..
Still alright. So that everything in the company's business is more or less even, highly desirable, to keep corporate default rates low enough. And according to the predictions, he will stay that way. Certainly, everything can change, but so far the forecasts in this area are positive for BK.
What can get in the way
ESG. A US company was recently fined $1.5 million for, that she was misleading customers about the ESG certification of part of her investments.
I hope to be wrong, but I'm afraid, no matter how this story is inflated by left-liberal activists, which can significantly complicate BK's life and lead to his large-scale boycott. This is purely a theoretical threat., but in the modern USA much more is possible, than most investors would like to think.
fix this here. The situation in the world is changing very quickly, so that if necessary, the company will cut dividends quickly and ruthlessly, "without waiting for peritonitis".
What's the bottom line?
BK is a good asset, something to keep in mind for dividend investors.
