OFG Bancorp (OFG) vs. Bank of New York Mellon (BK) Financial Comparison

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Bank of New York Mellon (NYSE:BK) and OFG Bancorp (NYSE:OFG) are both finance companies, but which is the superior stock? We will contrast the two companies based on the strength of their risk, analyst recommendations, dividends, institutional ownership, valuation, earnings and profitability.

Insider & Institutional Ownership

83.4% of Bank of New York Mellon shares are held by institutional investors. Comparatively, 88.1% of OFG Bancorp shares are held by institutional investors. 1.8% of Bank of New York Mellon shares are held by company insiders. Comparatively, 2.4% of OFG Bancorp shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Risk and Volatility

Bank of New York Mellon has a beta of 1.03, suggesting that its share price is 3% more volatile than the S&P 500. Comparatively, OFG Bancorp has a beta of 1.51, suggesting that its share price is 51% more volatile than the S&P 500.

Dividends

Bank of New York Mellon pays an annual dividend of $1.12 per share and has a dividend yield of 2.1%. OFG Bancorp pays an annual dividend of $0.28 per share and has a dividend yield of 1.3%. Bank of New York Mellon pays out 26.6% of its earnings in the form of a dividend. OFG Bancorp pays out 18.4% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Bank of New York Mellon has raised its dividend for 6 consecutive years. Bank of New York Mellon is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Ratings

This is a summary of current ratings and price targets for Bank of New York Mellon and OFG Bancorp, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Bank of New York Mellon 2 6 3 0 2.09
OFG Bancorp 0 0 3 0 3.00

Bank of New York Mellon presently has a consensus target price of $54.75, suggesting a potential upside of 2.68%. OFG Bancorp has a consensus target price of $17.00, suggesting a potential downside of 19.66%. Given Bank of New York Mellon’s higher probable upside, research analysts plainly believe Bank of New York Mellon is more favorable than OFG Bancorp.

Valuation and Earnings

This table compares Bank of New York Mellon and OFG Bancorp’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Bank of New York Mellon $19.23 billion 2.74 $4.27 billion $4.21 12.67
OFG Bancorp $440.51 million 2.46 $84.41 million $1.52 13.92

Bank of New York Mellon has higher revenue and earnings than OFG Bancorp. Bank of New York Mellon is trading at a lower price-to-earnings ratio than OFG Bancorp, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Bank of New York Mellon and OFG Bancorp’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Bank of New York Mellon 22.19% 11.53% 1.22%
OFG Bancorp 19.16% 10.38% 1.30%

Summary

Bank of New York Mellon beats OFG Bancorp on 9 of the 16 factors compared between the two stocks.

Bank of New York Mellon Company Profile

The Bank of New York Mellon Corporation provides a range of financial products and services to institutions, corporations, and high net worth individuals in the United States and internationally. The company operates through two segments, Investment Management and Investment Services. It offers investment management, custody, foreign exchange, fund broker-dealer, collateral and liquidity, clearing, corporate trust, global payment, trade finance, and cash management services, as well as securities finance and depositary receipts. The company also provides mutual funds, separate accounts, and wealth management and private banking services; and trust and registered investment advisory services. In addition, it engages in leasing, corporate treasury, derivative and other trading, corporate and bank-owned life insurance, renewable energy investment, and business exit activities. The Bank of New York Mellon Corporation was founded in 1784 and is headquartered in New York, New York.

OFG Bancorp Company Profile

OFG Bancorp, a financial holding company, provides various banking and financial services. It operates in three segments: Banking, Wealth Management, and Treasury. The company offers checking and savings accounts, as well as time deposit products; commercial, consumer, auto, and mortgage lending products; and financial planning, investment brokerage, corporate and individual trust, and retirement services. It also offers securities brokerage services, including various investment alternatives, such as tax-advantaged fixed income securities, mutual funds, stocks, and bonds to retail and institutional clients; separately-managed accounts and mutual fund asset allocation programs; and pension administration and other financial services. In addition, the company is involved in the management and participation in public offerings and private placements of debt and equity securities; insurance agency business; and administration of retirement plans. Further, it is involved in various treasury-related functions with an investment portfolio consisting of mortgage-backed securities, obligations of U.S. government sponsored agencies, Puerto Rico government and agency obligations, and money market instruments. The company operates through a network of 48 branches in Puerto Rico. OFG Bancorp was founded in 1964 and is based in San Juan, Puerto Rico.

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