The Bank of New York Mellon Corp. : BK-US: Dividend Analysis : May 02nd, 2017 (record date) : By the numbers : April 28, 2017

Our analysis is based on comparing The Bank of New York Mellon Corp. with the following peers – Northern Trust Corporation, Wells Fargo & Company, Citigroup Inc, Canadian Imperial Bank of Commerce, JPMorgan Chase & Co. and State Street Corporation (NTRS-US, WFC-US, C-US, CM-US, JPM-US and STT-US).

The Bank of New York Mellon Corp.’s dividend yield is 1.57 percent and its dividend payout is 22.77 percent. This compares to a peer average dividend yield of 1.75 percent and a payout level of 29.89 percent. This relatively lagging dividend performance could spur some dividend action going forward – except the company’s current dividend quality score of 50 out of a possible score of 100 is only about average.

Dividend Yield
Dividend Quality Score

Dividend Quality Overview

  • Over the last twelve months (prior to March 31, 2017), BK-US paid a low quality dividend, which represents a yield of 1.57% at the current price.
  • Dividend quality trend has not been consistent over the last five years. Dividends were paid during each of these years — of these 4 were medium quality and 1 was low quality.
  • The ending cash balance, with a dividend coverage of 80.80x, provides a substantial cushion in case of a significant reduction of cash flows in the future.
Dividend Quality Score Vs Dividend Yield

Quadrant label definitions. Hover to know more

High Score;High Yield, High Score;Low Yield, Low Score;Low Yield, Low Score;High Yield

Dividend Coverage

Over the last twelve months (prior to March 31, 2017), BK-US paid a low quality dividend.

The source of the company’s cash to support the dividend paid over the last twelve months is operating cash flow (coverage of 5.45x), investing cash flow (coverage of 68.39x), issuance cash flow (coverage of -74.90x) and twelve-month prior cash (coverage of 128.99x), for a total dividend coverage of 91.56x.

BK-US‘s issuance cash flow includes outflows from net debt repayment (coverage of -3.11x) and net share buybacks (coverage of -1.21x). Thus, the total coverage including share buybacks is 83.01x, which reflects our assumption that the cash paid for share buybacks is discretionary and could instead be used to pay dividends.

Dividend Coverage by Cash Flow (TTM)

These coverage ratio factors imply that the firm had to dip into the beginning cash balance to pay the dividend, which suggests a low dividend quality.

Dividend History

Item 2012-12-31 2013-12-31 2014-12-31 2015-12-31 2016-12-31 Latest
Dividend Yield (%) 2.08 1.7 1.68 1.7 1.57 1.57
Dividend Payout (%) 25.62 33.33 30.7 25.09 22.86 22.77

A complete list of metrics and analysis is available on the company page.

Company Profile

The Bank of New York Mellon Corp. is a bank holding company, which engages in the provision of financial services. It operates through the following segments: Investment Management, Investment Services, and Other. The Investment Management segment provides services on mutual funds and seed capital activities. The Investment Services segment includes institutional trust and custody fees, broker-dealer services, corporate trust, depositary receipts, and foreign exchange. The Other segment consists of leasing portfolio, corporate treasury, derivatives, and insurance services. The company was founded by Alexander Hamilton on July 1, 2007 and is headquartered in New York, NY.

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