Critical Analysis: F.N.B. (NYSE:FNB) and KeyCorp (NYSE:KEY)

F.N.B. (NYSE:FNB) and KeyCorp (NYSE:KEY) are both finance companies, but which is the superior business? We will compare the two businesses based on the strength of their analyst recommendations, earnings, dividends, risk, institutional ownership, profitability and valuation.

Risk and Volatility

F.N.B. has a beta of 0.96, indicating that its stock price is 4% less volatile than the S&P 500. Comparatively, KeyCorp has a beta of 1.25, indicating that its stock price is 25% more volatile than the S&P 500.

Institutional & Insider Ownership

79.3% of F.N.B. shares are held by institutional investors. Comparatively, 79.7% of KeyCorp shares are held by institutional investors. 1.0% of F.N.B. shares are held by insiders. Comparatively, 0.6% of KeyCorp shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Profitability

This table compares F.N.B. and KeyCorp’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
F.N.B.	18.27%	9.04%	1.16%
KeyCorp	7.35%	8.64%	0.54%

Dividends

F.N.B. pays an annual dividend of $0.48 per share and has a dividend yield of 3.5%. KeyCorp pays an annual dividend of $0.82 per share and has a dividend yield of 4.9%. F.N.B. pays out 38.7% of its earnings in the form of a dividend. KeyCorp pays out 103.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. KeyCorp has increased its dividend for 13 consecutive years. KeyCorp is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Recommendations

This is a breakdown of current ratings and price targets for F.N.B. and KeyCorp, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
F.N.B.	0	1	5	0	2.83
KeyCorp	0	6	11	0	2.65

F.N.B. presently has a consensus target price of $15.29, indicating a potential upside of 10.45%. KeyCorp has a consensus target price of $16.91, indicating a potential upside of 0.79%. Given F.N.B.’s stronger consensus rating and higher possible upside, analysts plainly believe F.N.B. is more favorable than KeyCorp.

Valuation and Earnings

This table compares F.N.B. and KeyCorp”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
F.N.B.	$1.56 billion	3.20	$485.00 million	$1.24	11.16
KeyCorp	$10.40 billion	1.52	$967.00 million	$0.79	21.24

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

Summary

F.N.B. beats KeyCorp on 9 of the 17 factors compared between the two stocks.

About F.N.B.

F.N.B. Corporation, a bank and financial holding company, provides a range of financial products and services primarily to consumers, corporations, governments, and small- to medium-sized businesses in the United States. The company operates through three segments: Community Banking, Wealth Management, and Insurance. The Community Banking segment offers commercial and consumer banking services, including corporate and small business banking, investment real estate financing, business credit, capital market, and lease financing services. It also provides consumer banking products and services, such as deposit products, mortgage and consumer lending services, and mobile and online banking services. The Wealth Management segment provides personal and corporate fiduciary services comprising administration of decedent and trust estates; and securities brokerage and investment advisory services, mutual funds, and annuities. The Insurance segment comprises commercial and personal insurance, and reinsurance products, as well as mezzanine financing options for small- to medium-sized businesses. The company operates community banking branches in Pennsylvania, Ohio, Maryland, West Virginia, North Carolina, South Carolina, Washington, D.C., and Virginia. F.N.B. Corporation was founded in 1864 and is headquartered in Pittsburgh, Pennsylvania.

About KeyCorp

KeyCorp operates as the holding company for KeyBank National Association that provides various retail and commercial banking products and services in the United States. It operates in two segments, Consumer Bank and Commercial Bank. The company offers various deposits, investment products and services; commercial leasing, investment management, consumer finance; and personal finance and financial wellness, student loan refinancing, mortgage and home equity, lending, credit card, treasury, business advisory, wealth management, asset management, cash management, portfolio management, and trust and related services to individuals and small and medium-sized businesses. It also provides 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 to consumer, energy, healthcare, industrial, public sector, real estate, and technology sectors for middle market clients. In addition, the company offers community development financing, securities underwriting, brokerage, and investment banking services. The company was founded in 1849 and is headquartered in Cleveland, Ohio.