Today, Bank of New York Mellon Corp (NYSE:BK) announced its intention to increase the quarterly common stock cash dividend by 12%, from $0.42 to $0.47 per share, starting potentially in the third quarter of 2024, pending Board of Directors approval.
This decision comes as the Federal Reserve confirmed that the bank's preliminary Stress Capital Buffer (SCB) requirement will remain at the regulatory minimum of 2.5%. The SCB, which is a capital adequacy standard, is slated to be effective from October 1, 2024, through September 30, 2025.
The announcement also reiterated the bank's ongoing authorization to repurchase common shares under its existing program, which was approved by the Board in January 2023 and reaffirmed in April 2024. The bank may carry out these repurchases through the open market, privately negotiated transactions, or other means, which may include structured transactions compliant with Rule 10b5-1.
The timing and volume of the share repurchases will be contingent on a range of factors such as the bank's capital position and market conditions. The bank's forward-looking statements indicate plans for stock repurchases and dividend payments, emphasizing its capital base and ability to meet regulatory requirements.
These forward-looking statements, as disclosed in the SEC filing, are not guarantees of future performance and are subject to uncertainties and changes based on current expectations about future events. Bank of New York Mellon has stated it will not update the information to reflect events or circumstances that arise after the date of the filing or to reflect the occurrence of unanticipated events.
The information in this article is derived from a press release statement filed with the Securities and Exchange Commission.
In other recent news, Bank of New York Mellon, now known as BNY, has seen significant developments. Keefe, Bruyette & Woods upgraded the bank's stock from Market Perform to Outperform and raised its price target to $70.00.
The firm anticipates robust growth for BNY's Market and Wealth Services segment and expects a rise in core pretax margins and return on tangible common equity by 2025. BNY passed the Federal Reserve's annual stress test, demonstrating its ability to withstand a severe economic downturn.
BNY has also unveiled a new brand name and logo, highlighting innovation as a key factor in the bank's longevity. Meanwhile, Compañia de Minas Buenaventura has resumed ore treatment operations at its El Brocal processing plant, aiming to meet its third-quarter production targets. These are among the latest developments in the financial sector.
InvestingPro Insights
In light of Bank of New York Mellon Corp's (NYSE:BK) recent announcement on dividend increase and share repurchase authorization, a closer look at the company's financial metrics through InvestingPro data provides additional context for investors.
The bank's market capitalization stands at a robust $44.69 billion, with a P/E ratio of 14.88, which adjusts to an even more attractive 11.62 when considering the last twelve months as of Q1 2024. This favorable valuation is further underscored by a PEG ratio of 0.56 during the same period, suggesting potential for growth when compared to its earnings.
Moreover, Bank of New York Mellon's commitment to shareholder returns is evident in its long history of maintaining dividend payments for 54 consecutive years and a recent 13.51% dividend growth. The dividend yield as of mid-2024 is a solid 2.82%.
InvestingPro Tips highlight that the company is not only trading at a low P/E ratio relative to near-term earnings growth, which can be appealing for value investors, but also that analysts predict profitability for the current year. These insights, paired with the company's stable revenue growth of 4.12% over the last twelve months as of Q1 2024, paint a picture of a financially sound institution poised for steady performance.
For those looking to delve deeper into the financial health and future prospects of Bank of New York Mellon Corp, additional InvestingPro Tips are available, offering an in-depth analysis of the company's metrics and market position. To access these insights and benefit from the full suite of analytical tools, investors can use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
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