Contrasting Bank of New York Mellon (NYSE:BK) and Bank7 (NASDAQ:BSVN)

Bank7 (NASDAQ:BSVN) and Bank of New York Mellon (NYSE:BK) are both finance companies, but which is the superior investment? We will contrast the two businesses based on the strength of their analyst recommendations, risk, valuation, dividends, earnings, profitability and institutional ownership.

Analyst Recommendations

This is a breakdown of recent ratings and target prices for Bank7 and Bank of New York Mellon, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Bank7	0	1	2	0	2.67
Bank of New York Mellon	0	4	5	0	2.56

Bank7 presently has a consensus price target of $32.67, suggesting a potential upside of 13.94%. Bank of New York Mellon has a consensus price target of $60.17, suggesting a potential upside of 3.70%. Given Bank7’s stronger consensus rating and higher possible upside, equities analysts clearly believe Bank7 is more favorable than Bank of New York Mellon.

Volatility and Risk

Bank7 has a beta of 1.49, suggesting that its share price is 49% more volatile than the S&P 500. Comparatively, Bank of New York Mellon has a beta of 1.08, suggesting that its share price is 8% more volatile than the S&P 500.

Earnings & Valuation

This table compares Bank7 and Bank of New York Mellon’s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Bank7	$130.79 million	2.03	$28.27 million	$3.23	8.88
Bank of New York Mellon	$33.81 billion	1.28	$3.29 billion	$4.10	14.15

Bank of New York Mellon has higher revenue and earnings than Bank7. Bank7 is trading at a lower price-to-earnings ratio than Bank of New York Mellon, indicating that it is currently the more affordable of the two stocks.

Dividends

Bank7 pays an annual dividend of $0.84 per share and has a dividend yield of 2.9%. Bank of New York Mellon pays an annual dividend of $1.68 per share and has a dividend yield of 2.9%. Bank7 pays out 26.0% of its earnings in the form of a dividend. Bank of New York Mellon pays out 41.0% 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 13 consecutive years. Bank7 is clearly the better dividend stock, given its higher yield and lower payout ratio.

Profitability

This table compares Bank7 and Bank of New York Mellon’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Bank7	21.70%	17.61%	1.71%
Bank of New York Mellon	9.48%	11.80%	1.02%

Institutional & Insider Ownership

23.5% of Bank7 shares are owned by institutional investors. Comparatively, 85.3% of Bank of New York Mellon shares are owned by institutional investors. 44.0% of Bank7 shares are owned by insiders. Comparatively, 0.1% of Bank of New York Mellon shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Summary

Bank7 beats Bank of New York Mellon on 10 of the 17 factors compared between the two stocks.

About Bank7

Bank7 Corp. operates as a bank holding company for Bank7 that provides banking and financial services to individual and corporate customers. It offers commercial deposit, commercial checking, money market, and other deposit accounts; and retail deposit services, such as certificates of deposit, money market accounts, checking accounts, negotiable order of withdrawal accounts, savings accounts, and automated teller machine access. The company also provides commercial real estate, hospitality, energy, and commercial and industrial lending services; consumer lending services to individuals for personal and household purposes comprising residential real estate loans and mortgage banking services, personal lines of credit, loans for the purchase of automobiles, and other installment loans, as well as secured and unsecured term loans and home improvement loans. It operates through a network of full-service branches in Oklahoma, the Dallas/Fort Worth, Texas metropolitan area, and Kansas. The company was formerly known as Haines Financial Corp. Bank7 Corp. was founded in 1901 and is headquartered in Oklahoma City, Oklahoma.

About Bank of New York Mellon

The Bank of New York Mellon Corporation provides a range of financial products and services in the United States and internationally. The company operates through Securities Services, Market and Wealth Services, Investment and Wealth Management, and other segments. The Securities Services segment offers custody, trust and depositary, accounting, exchange-traded funds, middle-office solutions, transfer agency, services for private equity and real estate funds, foreign exchange, securities lending, liquidity/lending services, and data analytics. This segment also provides trustee, paying agency, fiduciary, escrow and other financial, issuer, and support services for brokers and investors. The Market and Wealth Services segment offers clearing and custody, investment, wealth and retirement solutions, technology and enterprise data management, trading, and prime brokerage services. This segment also provides integrated cash management solutions, including payments, foreign exchange, liquidity management, receivables processing and payables management, and trade finance and processing services. The Investment and Wealth Management segment offers investment management strategies and distribution of investment products, investment management, custody, wealth and estate planning, private banking, investment, and information management services. The Other segment engages in the provision of leasing, corporate treasury, derivative and other trading, corporate and bank-owned life insurance, renewable energy investment, and business exit services. It serves central banks and sovereigns, financial institutions, asset managers, insurance companies, corporations, local authorities and high net-worth individuals, and family offices. The Bank of New York Mellon Corporation was founded in 1784 and is headquartered in New York, New York.