Contrasting KeyCorp (KEY) & FCB Financial (FCB)

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

Analyst Recommendations

This is a breakdown of recent ratings for KeyCorp and FCB Financial, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
KeyCorp 1 5 17 0 2.70
FCB Financial 0 3 3 0 2.50

KeyCorp presently has a consensus target price of $23.00, indicating a potential upside of 37.48%. FCB Financial has a consensus target price of $55.60, indicating a potential upside of 52.20%. Given FCB Financial’s higher possible upside, analysts clearly believe FCB Financial is more favorable than KeyCorp.

Risk and Volatility

KeyCorp has a beta of 1.01, suggesting that its stock price is 1% more volatile than the S&P 500. Comparatively, FCB Financial has a beta of 1.35, suggesting that its stock price is 35% more volatile than the S&P 500.

Institutional & Insider Ownership

79.7% of KeyCorp shares are owned by institutional investors. Comparatively, 89.1% of FCB Financial shares are owned by institutional investors. 0.7% of KeyCorp shares are owned by insiders. Comparatively, 9.6% of FCB Financial shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Dividends

KeyCorp pays an annual dividend of $0.68 per share and has a dividend yield of 4.1%. FCB Financial does not pay a dividend. KeyCorp pays out 50.0% of its earnings in the form of a dividend. KeyCorp has raised its dividend for 7 consecutive years.

Profitability

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

Net Margins Return on Equity Return on Assets
KeyCorp 21.47% 12.56% 1.27%
FCB Financial 29.45% 13.02% 1.44%

Earnings and Valuation

This table compares KeyCorp and FCB Financial’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
KeyCorp $6.87 billion 2.52 $1.30 billion $1.36 12.30
FCB Financial $409.12 million 4.18 $125.19 million $3.28 11.14

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

Summary

FCB Financial beats KeyCorp on 10 of the 17 factors compared between the two stocks.

About KeyCorp

KeyCorp operates as the holding company for KeyBank National Association that provides various retail and commercial banking services in the United States. The company's Key Community Bank segment offers various deposit and investment products, personal finance services, residential mortgages, home equity loans, credit cards, and installment loans, as well as personal property and casualty insurance, such as home, auto, renters, watercraft, and umbrella insurance for individuals. It also purchases retail auto sales contracts through a network of auto dealership; offers financial, estate and retirement planning, asset management, and trust services, as well as portfolio management, life insurance, charitable giving, and related services for high-net-worth clients. In addition, this segment provides deposits, investment and credit products, and business advisory services to small businesses; and commercial lending, cash management, equipment leasing, investment, and commercial property and casualty insurance products, as well as employee benefit programs, succession planning, capital market access, derivatives, and foreign exchange services to mid-sized businesses. Its Key Corporate Bank segment offers a suite of banking and capital market products, such as syndicated finance, debt and equity capital market products, commercial payments, equipment finance, commercial mortgage banking, derivatives, foreign exchange, financial advisory, and public finance, as well as commercial mortgage loans for middle market clients comprising consumer, energy, healthcare, industrial, public, real estate, and technology sectors. As of December 31, 2017, the company offered its products and services through 1,197 retail banking branches and 1,572 automated teller machines in 15 states, as well as additional offices, online and mobile banking capabilities, and a telephone banking call center. KeyCorp was founded in 1849 and is headquartered in Cleveland, Ohio.

About FCB Financial

FCB Financial Holdings, Inc. operates as the bank holding company for Florida Community Bank, N.A. that provides various financial products and services to individuals, small and medium-sized businesses, large businesses, and other local organizations and entities in south and central Florida. The company offers various deposit products, including demand deposit accounts, interest-bearing products, savings accounts, and certificates of deposit; checking products; and money market accounts and IRAs. It also offers consumer loans, such as personal and auto loans, recreational loans, and home improvement/second mortgage loans. In addition, the company provides commercial credit products, such as lines of credit to finance working capital and trade activities; loans for owner occupied real estate financing; equipment financing; acquisition financing; construction financing, mini-permanent and permanent financing, acquisition and development lending, land financing, and bridge lending services to commercial real estate clients; and specialty financing services to owners and operators in the areas of aviation and marine lending, as well as participates in club lending structures. Further, it offers syndicated loans; credit cards and purchasing cards; and derivative products, such as interest rate swaps; treasury products; securities brokerage services, investment advice, and investment recommendations; and online and mobile banking, safe deposit boxes, and payment services. As of December 31, 2017, FCB Financial Holdings, Inc. operated through a network of 46 banking centers in Florida. The company was formerly known as Bond Street Holdings, Inc. and changed its name to FCB Financial Holdings, Inc. in June 2014. FCB Financial Holdings, Inc. was founded in 1923 and is headquartered in Weston, Florida.

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