KeyCorp (NYSE:KEY) and M&T Bank (NYSE:MTB) are both large-cap finance companies, but which is the better stock? We will compare the two businesses based on the strength of their dividends, institutional ownership, risk, valuation, earnings, profitability and analyst recommendations.
Dividends
KeyCorp pays an annual dividend of $0.74 per share and has a dividend yield of 4.5%. M&T Bank pays an annual dividend of $4.40 per share and has a dividend yield of 3.6%. KeyCorp pays out 41.1% of its earnings in the form of a dividend. M&T Bank pays out 32.0% 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. KeyCorp has increased its dividend for 9 consecutive years and M&T Bank has increased its dividend for 2 consecutive years. KeyCorp is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Earnings and Valuation
This table compares KeyCorp and M&T Bank's gross revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio |
|---|
| KeyCorp | $7.69 billion | 2.10 | $1.72 billion | $1.80 | 9.17 |
| M&T Bank | $6.94 billion | 2.26 | $1.93 billion | $13.75 | 8.89 |
M&T Bank has lower revenue, but higher earnings than KeyCorp. M&T Bank is trading at a lower price-to-earnings ratio than KeyCorp, indicating that it is currently the more affordable of the two stocks.
Insider and Institutional Ownership
79.7% of KeyCorp shares are held by institutional investors. Comparatively, 82.8% of M&T Bank shares are held by institutional investors. 0.7% of KeyCorp shares are held by insiders. Comparatively, 0.6% of M&T Bank shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.
Profitability
This table compares KeyCorp and M&T Bank's net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets |
|---|
| KeyCorp | 16.38% | 7.87% | 0.76% |
| M&T Bank | 21.49% | 9.45% | 1.06% |
Analyst Recommendations
This is a summary of recent ratings and target prices for KeyCorp and M&T Bank, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score |
|---|
| KeyCorp | 4 | 11 | 4 | 0 | 2.00 |
| M&T Bank | 1 | 12 | 2 | 0 | 2.07 |
KeyCorp presently has a consensus target price of $18.2833, suggesting a potential upside of 10.74%. M&T Bank has a consensus target price of $130.2143, suggesting a potential upside of 6.47%. Given KeyCorp's higher possible upside, analysts clearly believe KeyCorp is more favorable than M&T Bank.
Risk & Volatility
KeyCorp has a beta of 1.53, suggesting that its share price is 53% more volatile than the S&P 500. Comparatively, M&T Bank has a beta of 1.2, suggesting that its share price is 20% more volatile than the S&P 500.
Summary
M&T Bank beats KeyCorp on 9 of the 17 factors compared between the two stocks.
