Sign New York Banking Claim Now

Industry sign banking new york claim now

all right so and welcome everybody to another stock analysis video where today we'll be talking about bank of new york mellon ticker symbol bk this company is traded on the new york stock exchange and trades for about 41 dollars a share currently so this company has fallen a bit this year we consider that the company started about 51 dollars a share over the year and then it has come down uh since then so we've got currently about 41 a share if you were interested in purchasing the stock and so what we're going to do in this video is talk about whether the company currently is overvalued or undervalued and then we're going to give you a long-term analysis on this company so you can decide for yourself whether or not you'd be interested in purchasing the stock or whether or not you want to weigh a year or two before you enter a position so basically that's what we're going to talk about this video we're going to talk about earnings we're going to talk about um value we're going to talk about their assets and all the ways that they make money as well so without further ado let's get started so if you clicked on this video you may already understand how bny actually works well basically they're a major financial institution that primarily invests to make their money so they invest other people's money in funds and then they will try to hopefully make money based off of that now they do offer interest rates for like some cds that they offer so like bank accounts although not much information was given about this so they have many assets under their name we consider that they have 38.6 trillion dollar trillion dollars worth of assets under their custody then they have two trillion dollars under asset management which is basically for investing purposes and they work in 35 countries so this company has definitely worked very hard to grow its business and definitely they seem to be doing well with it now although this company seems to be doing very well uh warren buffett actually reduced his stake and so that's pretty surprising right now especially when he's increased the stake in other banks like bank of america now he's pulled out his stake in a few other banks as well such as pnc bank and a few others like u.s bank but basically he's definitely been reducing his stake in bny melon and so i definitely am interested to hear more about that so hopefully in the shareholder meeting he'll be able to talk about that but definitely keep that in mind as as other major investors may not be so interested in this company so look into that if you're interested now in terms of value this company is actually very undervalued in terms of intrinsic value so we consider that for their intrinsic value the company currently has about an 80 per share value so that's actually really good to see and the intrinsic value is basically a value that the stock should trade towards over time so you can calculate that by using earnings you can calculate that also by using like their assets and also their growth and so the idea is to find that value that the stock should trade towards over time and so you use basically a growth multiple the free cash flow and then also the total shareholders equity of the company so the growth multiple you calculate that yourself you can calculate that by finding maybe a percentage of the dividend growth or maybe figuring out what the earnings were up the previous year and then comparing it to the earnings in the new year um but basically that's you'll calculate a growth multiple based off of that if you want to figure out like an exact formula um i'd look it up but basically you can calculate the growth multiple through that it tends to be between 8 and 14 about and then you multiply that by the free cash flow of company and that's basically they for here they take a six year average of that which is basically like the average earnings of the company over a six year period and so they multiply that by the growth multiple to get the long-term thought of where the company is going to go because we're investing in companies over the long term the idea of putting your money in a stock is that you're going to hopefully hopefully the company is going to benefit in the long term so their earnings should grow so as long as you believe that they're earning to grow they should have a solid growth multiple and then you want to multiply that by the earnings to get a value that the stock should trade towards and then you add the total stockholders equity or the total shareholders equity however you want to call it which is basically the assets minus the day of the company and so that's how you get basically the assets or the actual worth of the shares of the company and so you add that and then you divide that by the shares outstanding in the market and so by dividing it by the shares outstanding in the market you basically get an actual value per share of the company and that's why that's basically how we calculate the intrinsic value per share of the company so you can look at eighty dollars a share and then look at forty one dollars a share and now you have basically an expected value of where you want the company to go or you want the company to trade towards over time now many companies especially banks do not seem to trade at their intrinsic value um especially like insurance companies um some certain companies like that tend to trade actually below their intrinsic value which is sort of fascinating um but that's that's basically how the companies have been valued by the market however their actual worth seems to be well above what the actual trading price is for most of these companies at least and so it's very important to note that these companies actually may be very very good value investments over time now another thing i want to really look into is the book value per share of the company now how we calculate the book value per share of the company is by basically taking the shareholder equity and then we divide it by the number of outstanding shares in the market so basically what you get is you get a value for the asset basically the asset worth per share of the stock so currently right here we can calculate it to be about 46 dollars a share and so basically the idea of that is to tell you that this company although it's trading at 41 a share it's actually its assets alone make this company worth more than 41 dollars a share and so just with that in mind the idea of the intrinsic values is basically because it's giving you that value that the stock should trade towards companies don't trade just off of their assets that you're off of their earnings and news and other things like that and so that's why the intrinsic value is a far better way of looking at where the stock should go um than the actual book value but just if you're concerned about the intrinsic value for whatever reason the book value here since its assets are literally worth more than the actual trading price this just proves that the company is truly undervalued right now now we take a look at the shareholder equity over a 14-year period we get serious that they've done very well they've consistently increased their shareholder equity and i'm not surprised about that because they do have a consistent net income so since they are profiting consistently they are able to basically provide a consistent growth for their shareholder equity and then they're also able to buy back their own stock so this increases the book value per share of the company which also increases the intrinsic value and then this justifies a higher trading price for the stock and so that's how this benefits you in the long term now another thing i like to talk about besides the shareholder equity is also the p e ratio of the company so we consider that for the actual p ratio of the company is basically well below what it normally is so currently the p ratio of the company is about nine um when it normally trades at about 15. now a lot of banks tend to trade at p ratio of about 15 so that's pretty average um we can take a look at like bank of america and jp morgan to look at that kind of stuff as well but basically the p ratios tend to be at about 15. so this company definitely seems to be undervalued based off of that especially compared to other sectors uh there are even compared to other sectors as well so in their industry they seem to be very undervalued based off of just price to earnings but also for price for their p e ratio we can also understand that this company seems to be undervalued compared to the overall market the overall market or the s p 500 we can talk about that specifically the s p 500 has a p ratio of about 22.6 so with a p ratio of about nine here this shows that the company seems to be very undervalued relative to the fortune 500 companies now if you're wondering basically how the p ratio works it's basically as the earnings increase the price at which the stock should trade at should increase along with that so that's the idea of the p ratio if it's flat as the earnings increase the price should increase as well and so that makes sense that also goes along with the intrinsic value and the id of the intrinsic value as well now since the earnings have increased relatively steadily um but the price hasn't necessarily increased that's why the actual p e ratio has actually decreased and that's actually a very good sign for you if you're a new investor to maybe say well i might want to buy a stake in this company right now compared to later now of course it's interesting if the company actually loses money but increases in trading value then the p ratio will actually go up quite a bit and so the idea is to basically make sure the p ratio is either steady or it's decreasing and so that's basically the idea though it's preferable of course that's decreasing because then that means that the company is actually trading at a value less than when it should be so definitely keep that in mind now in terms of revenue this company is actually doing relatively okay throughout the pandemic we consider that their revenue hasn't really changed too much and so that's great that's great to see for right now um we can see that they make about 3.8 billion dollars in revenue each quarter and they've been consistently pulling through with this number for many many quarters as we can see here now i think that the revenue is really important but there's one more thing that's even more important and specifically that would be the net income of the company the net income actually takes into account what the profit of the company is so this is after paying workers and paying any fees that they may have to get this these kind of investments and so basically the idea is that the net income is the actual profit of the company so we consider that each quarter they bring in about 800 million dollars uh just for the company and that's actually really good to see as long as this company is continuously able to profit and maybe even increase in profit that is of course very good for the shareholders and that's very good for you if you're investing in this company now this company has had times where during like the 2008 recession they lost a lot of money like many other banks and we could say that they lost about 2.5 billion dollars in one quarter which is a lot of money of course now of course this company has actually been doing very well throughout the pandemic because the stock market has been doing very well now they don't just invest in the stock market but they invest in other things as well however it's certainly fascinating to see if the company is doing so well especially during a pandemic when many other banks such as wells fargo actually seem to be struggling so this company is actually doing very well and seems to be outperforming now there's two more things i want to talk about before we end this video and that would be the buybacks of the company basically the stock buybacks and then also the dividend of this company so currently this company does buy back its own stock consistently um however they have been not able to do so during the pandemic because banks have been put on like sort of a restriction by the us government to basically not allow them to repurchase their own stock so this has basically been just in the hopes of helping banks get through this pandemic and so since this company is actually doing very well and this restriction has been lifted recently um the fed basically has allowed the banks such as bny to continue to repurchase their own stock and that will help you in the long term as there's less shares outstanding in the market when they repurchase their stock and so this will increase the book value likely as long as their assets do seem to increase continuously also when your company is buying back its own stock it gives you a larger stake in the company basically you basically own more of the assets which is why the book value increases and also it's because you also get a larger say in the company so the with their less where there being less outstanding shares in the market um this definitely helps you as a shareholder and last but not least let's talk about the dividend history of the company so the company currently pays a dividend yield of about three percent this company pays about 31 to share about right now and that's actually great to see that this company hasn't necessarily changed its dividend based off of what's going on right now i know a lot of banks such as capital one and wells fargo that have lowered their dividends which is very unfortunate for the shareholders uh but this bank has decided not to do that and so that's great to see for basically all the shareholders of course and that's great to see for the long term as this company is continuously willing to pay this dividend out to its shareholders despite whether what happens with the economy so definitely keep that in mind that this company definitely seems to be a good long-term dividend stock for that reason this company tends to increase its dividend about once every year by the way so this company definitely seems to be willing to increase its dividend as time goes on and it basically increases with earnings so as long as this company is doing well if it does better then they'll increase their dividend by more each year um and basically it just depends on how much this company is making and since this company is making plenty of money they are still willing to increase their dividend and that's great to see so overall what do we think about this company we do think that this company is very undervalued right now and we would expect this company to increase in value as time goes on we do think that this company is also a great long-term dividend stock so this company seems to be willing to pay out their dividend as time goes on as well however uh this company definitely doesn't seem to be one of those kind of major tech growth stocks or anything like that so if you're interested in more like the tech um industry and stuff like that and you're willing to make to pay more of a premium for your stock for more innovation then that may be better for you however this company for a value investor like me makes a lot of sense now of course please do your own research before actually investing in a company but this is basically our thoughts on this company so and hopefully you find that helpful anyway thank you so much for watching if you like this video please do like and subscribe as it does up our channel and please comment down below and tell us what you think about this company and we'll try to get back to you anyway thank you so much for watching and have a great day everybody