Analyzing KeyCorp (NYSE:KEY) and First BanCorp. (NYSE:FBP)

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

Dividends

First BanCorp. pays an annual dividend of $0.80 per share and has a dividend yield of 2.9%. KeyCorp pays an annual dividend of $0.82 per share and has a dividend yield of 3.7%. First BanCorp. pays out 33.8% of its earnings in the form of a dividend. KeyCorp pays out 47.7% 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. First BanCorp. has increased its dividend for 6 consecutive years.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
First BanCorp.	29.24%	18.03%	1.84%
KeyCorp	17.83%	11.23%	1.05%

Analyst Recommendations

This is a summary of recent ratings for First BanCorp. and KeyCorp, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
First BanCorp.	0	2	3	4	3.22
KeyCorp	0	7	12	1	2.70

First BanCorp. currently has a consensus target price of $29.38, suggesting a potential upside of 5.06%. KeyCorp has a consensus target price of $49.14, suggesting a potential upside of 124.06%. Given KeyCorp’s higher probable upside, analysts clearly believe KeyCorp is more favorable than First BanCorp..

Institutional and Insider Ownership

97.9% of First BanCorp. shares are held by institutional investors. Comparatively, 79.7% of KeyCorp shares are held by institutional investors. 1.9% of First BanCorp. shares are held by insiders. Comparatively, 0.6% of KeyCorp shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Earnings & Valuation

This table compares First BanCorp. and KeyCorp”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
First BanCorp.	$1.26 billion	3.40	$344.87 million	$2.37	11.80
KeyCorp	$11.23 billion	2.08	$1.83 billion	$1.72	12.75

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

Risk and Volatility

First BanCorp. has a beta of 0.8, indicating that its stock price is 20% less volatile than the S&P 500. Comparatively, KeyCorp has a beta of 1.02, indicating that its stock price is 2% more volatile than the S&P 500.

Summary

First BanCorp. beats KeyCorp on 11 of the 18 factors compared between the two stocks.

About First BanCorp.

First BanCorp. operates as a bank holding company for FirstBank Puerto Rico that provides a range of financial products and services to consumers and commercial customers. The company operates through six segments: Commercial and Corporate Banking, Mortgage Banking, Consumer (Retail) Banking, Treasury and Investments, United States Operations, and Virgin Islands Operations. The Commercial and Corporate Banking segment offers commercial loans, including commercial real estate and construction loans, as well as other products, such as cash management and business management services. The Mortgage Banking segment engages in the origination, sale, and servicing of various residential mortgage loans; hedging activities; and purchase of mortgage loans from branch and mortgage bankers. The Consumer (Retail) Banking segment provides auto loans, finance leases, boat and personal loans, credit card loans, and lines of credit; and interest-bearing and non-interest-bearing checking and savings accounts, and individual retirement accounts and retail certificates of deposit (CDs), as well as insurance agency services. The Treasury and Investments segment offers funding and liquidity management services. The United States Operations segment provides checking, savings, and money market accounts, as well as retail CDs; traditional commercial and industrial, and commercial real estate loans, residential mortgages, term and construction loan, home equity loans, lines of credit, FHLB advances, and brokered CDs; and internet banking, cash management, remote deposit capture, and automated clearing house transactions services. The Virgin Islands Operations segment is involved in consumer, commercial lending, and deposit-taking activities. First BanCorp. was founded in 1948 and is headquartered in San Juan, Puerto Rico.

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.