FMP
Jun 15, 2025(Last modified: Jun 16, 2025)
The Bank of New York Mellon Corporation (NYSE:BK) is a prominent financial institution known for its asset management and securities services. It operates globally, providing investment management, investment services, and wealth management. BK competes with other major financial institutions like State Street Corporation, U.S. Bancorp, and The PNC Financial Services Group, Inc.
BK's financial performance is highlighted by its impressive Return on Invested Capital (ROIC) of 294.89%, which is significantly higher than its Weighted Average Cost of Capital (WACC) of 20.53%. This results in a ROIC to WACC ratio of 14.36, indicating that BK is generating returns far above its cost of capital. This suggests efficient capital utilization and strong profitability.
In comparison, State Street Corporation (STT) shows a negative ROIC of -12.34% against a WACC of 17.19%, resulting in a ROIC to WACC ratio of -0.72. This negative ratio indicates that STT is not generating sufficient returns to cover its cost of capital, highlighting inefficiencies in capital utilization.
U.S. Bancorp (USB) and The PNC Financial Services Group, Inc. (PNC) have ROIC to WACC ratios of 0.32 and 0.35, respectively. Both companies have ROICs that are lower than their WACCs, indicating that their returns are not significantly above their cost of capital.
Fifth Third Bancorp (FITB) stands out among BK's peers with the highest ROIC to WACC ratio of 0.37. Despite this, FITB's ratio is still considerably lower than BK's, underscoring BK's superior capital efficiency and profitability. This positions BK as a leader in its industry, demonstrating its ability to generate substantial returns on its invested capital.
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