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3 Overlooked High-Quality Stocks

Our analysts are excited about these names.

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Today we're looking at three high-quality stocks that our analysts like.

Investor sentiment on wide-moat Bank of New York Mellon has soured, and as a result, it trades at a larger discount to our fair value estimate compared to other pure-play custodian banks. BNY Mellon and the custody banks in general do face headwinds, but we think it's important not to overstate the negatives. Though low interest rates will weigh on the firm, most of its revenue is fee-based, and its conservative balance sheet means the firm has only low credit risk. We believe there are pockets of growth for BNY Mellon, notably its Pershing business. In addition, compared with State Street and Northern Trust, BNY Mellon is more diversified and has less exposure to equity market movements. As a result, we believe shares of BNY Mellon present an attractive risk/reward profile.

Morningstar does not own shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.

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