KeyCorp (NYSE: KEY) and City (NASDAQ:CHCO) are both financials companies, but which is the superior stock? We will compare the two businesses based on the strength of their institutional ownership, risk, earnings, dividends, valuation, profitability and analyst recommendations.

Analyst Recommendations

This is a summary of current ratings and recommmendations for KeyCorp and City, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
KeyCorp 1 6 14 0 2.62
City 0 2 0 0 2.00

KeyCorp presently has a consensus target price of $21.44, suggesting a potential upside of 5.92%. City has a consensus target price of $66.50, suggesting a potential downside of 0.63%. Given KeyCorp’s stronger consensus rating and higher possible upside, equities analysts clearly believe KeyCorp is more favorable than City.

Profitability

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

Net Margins Return on Equity Return on Assets
KeyCorp 18.69% 10.35% 1.07%
City 29.25% 12.34% 1.45%

Dividends

KeyCorp pays an annual dividend of $0.42 per share and has a dividend yield of 2.1%. City pays an annual dividend of $1.76 per share and has a dividend yield of 2.6%. KeyCorp pays out 36.5% of its earnings in the form of a dividend. City pays out 45.8% 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. City has raised its dividend for 6 consecutive years. City is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Insider & Institutional Ownership

80.9% of KeyCorp shares are held by institutional investors. Comparatively, 65.0% of City shares are held by institutional investors. 0.7% of KeyCorp shares are held by insiders. Comparatively, 3.9% of City shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Valuation & Earnings

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

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
KeyCorp $5.39 billion 4.04 $791.00 million $1.15 17.60
City $190.98 million 5.47 $52.12 million $3.84 17.43

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

Volatility and Risk

KeyCorp has a beta of 1.09, meaning that its share price is 9% more volatile than the S&P 500. Comparatively, City has a beta of 0.84, meaning that its share price is 16% less volatile than the S&P 500.

Summary

KeyCorp beats City on 9 of the 17 factors compared between the two stocks.

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.

City Company Profile

City Holding Company is a financial holding company. The Company conducts its principal activities through its subsidiary, City National Bank of West Virginia (City National). As of December 31, 2016, the City National provided banking, trust and investment management and other financial solutions through its network of 85 banking offices located in the states of West Virginia, Virginia, eastern Kentucky and southeastern Ohio. City National offers various products and services, including commercial banking, consumer banking, mortgage banking, and wealth management and trust services. City National provides credit, deposit and investment advisory products and services to rural and small community markets in addition to cities, including Charleston, Huntington, Martinsburg, Winchester, Staunton, Virginia Beach, Ashland and Lexington. City National offers a range of commercial banking services to corporations and other business customers.

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