C&F Financial (NASDAQ:CFFI) & Bank of New York Mellon (NYSE:BK) Critical Analysis

Bank of New York Mellon (NYSE:BK) and C&F Financial (NASDAQ:CFFI) are both finance companies, but which is the superior stock? We will compare the two businesses based on the strength of their risk, institutional ownership, earnings, dividends, analyst recommendations, valuation and profitability.

Insider & Institutional Ownership

85.3% of Bank of New York Mellon shares are owned by institutional investors. Comparatively, 37.2% of C&F Financial shares are owned by institutional investors. 0.1% of Bank of New York Mellon shares are owned by company insiders. Comparatively, 6.3% of C&F Financial shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Earnings & Valuation

This table compares Bank of New York Mellon and C&F Financial’s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Bank of New York Mellon	$33.81 billion	1.34	$3.29 billion	$4.10	14.75
C&F Financial	$153.75 million	0.96	$23.60 million	$6.06	7.23

Bank of New York Mellon has higher revenue and earnings than C&F Financial. C&F Financial 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.

Risk & Volatility

Bank of New York Mellon has a beta of 1.09, suggesting that its stock price is 9% more volatile than the S&P 500. Comparatively, C&F Financial has a beta of 0.39, suggesting that its stock price is 61% less volatile than the S&P 500.

Analyst Ratings

This is a summary of current ratings and price targets for Bank of New York Mellon and C&F Financial, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Bank of New York Mellon	0	4	6	0	2.60
C&F Financial	0	0	0	0	N/A

Bank of New York Mellon presently has a consensus price target of $61.15, indicating a potential upside of 1.12%. Given Bank of New York Mellon’s higher probable upside, analysts plainly believe Bank of New York Mellon is more favorable than C&F Financial.

Profitability

This table compares Bank of New York Mellon and C&F Financial’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Bank of New York Mellon	9.48%	11.80%	1.02%
C&F Financial	13.29%	9.89%	0.85%

Dividends

Bank of New York Mellon pays an annual dividend of $1.68 per share and has a dividend yield of 2.8%. C&F Financial pays an annual dividend of $1.76 per share and has a dividend yield of 4.0%. Bank of New York Mellon pays out 41.0% of its earnings in the form of a dividend. C&F Financial pays out 29.0% 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 and C&F Financial has raised its dividend for 12 consecutive years. C&F Financial is clearly the better dividend stock, given its higher yield and lower payout ratio.

Summary

Bank of New York Mellon beats C&F Financial on 11 of the 16 factors compared between the two stocks.

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.

About C&F Financial

C&F Financial Corporation operates as a bank holding company for Citizens and Farmers Bank that provides banking services to individuals and businesses. It operates through three segments: Community Banking, Mortgage Banking, and Consumer Finance. The Community Banking segment offers various banking services, including checking and savings deposit accounts, as well as business, real estate, development, mortgage, home equity, and installment loans. This segment also provides ATMs, Internet and mobile banking, peer-to-peer payment capabilities, and debit cards, as well as safe deposit box rentals, notary public, electronic transfer, and other customary bank services. The Mortgage Banking segment provides various residential mortgage loans; originates conventional mortgage loans, mortgage loans insured by the Federal Housing Administration, and mortgage loans guaranteed by the United States Department of Agriculture and the Veterans Administration; and ancillary mortgage loan production services to third parties for residential appraisals, as well as various mortgage origination activities. The Consumer Finance segment provides automobile loans. It also offers brokerage and wealth management services, and insurance products and services, as well as title and settlement agency. C&F Financial Corporation was founded in 1927 and is headquartered in Toano, Virginia.