Sierra Bancorp (NASDAQ: BSRR) and KeyCorp (NYSE:KEY) are both finance companies, but which is the superior investment? We will contrast the two companies based on the strength of their analyst recommendations, dividends, earnings, profitability, valuation, institutional ownership and risk.

Valuation & Earnings

This table compares Sierra Bancorp and KeyCorp’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Sierra Bancorp $87.74 million 4.66 $17.56 million $1.50 17.92
KeyCorp $5.39 billion 3.87 $791.00 million $1.14 17.00

KeyCorp has higher revenue and earnings than Sierra Bancorp. KeyCorp is trading at a lower price-to-earnings ratio than Sierra Bancorp, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Sierra Bancorp and KeyCorp’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Sierra Bancorp 21.59% 9.87% 1.03%
KeyCorp 18.69% 10.35% 1.07%

Analyst Recommendations

This is a summary of current ratings for Sierra Bancorp and KeyCorp, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Sierra Bancorp 0 3 1 0 2.25
KeyCorp 1 9 12 0 2.50

Sierra Bancorp presently has a consensus target price of $27.94, suggesting a potential upside of 3.93%. KeyCorp has a consensus target price of $20.97, suggesting a potential upside of 8.19%. Given KeyCorp’s stronger consensus rating and higher possible upside, analysts plainly believe KeyCorp is more favorable than Sierra Bancorp.

Institutional and Insider Ownership

49.2% of Sierra Bancorp shares are held by institutional investors. Comparatively, 81.2% of KeyCorp shares are held by institutional investors. 20.8% of Sierra Bancorp shares are held by insiders. Comparatively, 0.7% of KeyCorp shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Dividends

Sierra Bancorp pays an annual dividend of $0.56 per share and has a dividend yield of 2.1%. KeyCorp pays an annual dividend of $0.42 per share and has a dividend yield of 2.2%. Sierra Bancorp pays out 37.3% of its earnings in the form of a dividend. KeyCorp pays out 36.8% 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 raised its dividend for 6 consecutive years. KeyCorp is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Volatility & Risk

Sierra Bancorp has a beta of 0.8, meaning that its share price is 20% less volatile than the S&P 500. Comparatively, KeyCorp has a beta of 1.1, meaning that its share price is 10% more volatile than the S&P 500.

Summary

KeyCorp beats Sierra Bancorp on 12 of the 17 factors compared between the two stocks.

Sierra Bancorp Company Profile

Sierra Bancorp is a bank holding company for Bank of the Sierra (the Bank). The Bank is a state-chartered bank, which offers a range of retail and commercial banking services. The Bank’s products and services are related to the business of lending money and accepting deposits. Its customers have access to electronic point-of-sale payment alternatives around the country through the Pulse Electronic Funds Transfer (EFT) network. Its Internet branch provides the ability to open deposit accounts online; an online banking option with bill-pay and mobile banking capabilities, including mobile check deposit; a customer service center that is accessible by toll-free telephone during business hours, and an automated telephone banking system. It offers a range of other banking products and services to complement and support its lending and deposit products, including remote deposit capture and automated payroll services for business customers.

KeyCorp Company Profile

KeyCorp is a bank holding company. The Company is a bank-based financial services company. The Company operates through its subsidiary, KeyBank National Association (KeyBank), which is engaged in providing banking services. Through KeyBank and other subsidiaries, it provides a range of retail and commercial banking, commercial leasing, investment management, consumer finance, and investment banking products and services to individual, corporate and institutional clients. Its segments include Key Community Bank and Key Corporate Bank. Key Community Bank serves individuals and small to mid-sized businesses by offering a range of deposit, investment, lending, credit card, and personalized wealth management products and business advisory services. Key Corporate Bank is a full-service corporate and investment bank focused on serving the needs of middle market clients in industry sectors, which include consumer, energy, healthcare, industrial, public sector, real estate and technology.

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