Critical Review: KeyCorp (KEY) and Peoples Financial Services (PFIS)

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

Valuation and Earnings

This table compares KeyCorp and Peoples Financial Services’ top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
KeyCorp $7.39 billion 2.04 $1.87 billion $1.73 8.65
Peoples Financial Services $98.32 million 3.37 $24.92 million N/A N/A



KeyCorp has higher revenue and earnings than Peoples Financial Services.

Dividends

KeyCorp pays an annual dividend of $0.68 per share and has a dividend yield of 4.5%. Peoples Financial Services pays an annual dividend of $1.36 per share and has a dividend yield of 3.0%. KeyCorp pays out 39.3% of its earnings in the form of a dividend. KeyCorp has increased its dividend for 8 consecutive years and Peoples Financial Services has increased its dividend for 2 consecutive years. KeyCorp is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

This table compares KeyCorp and Peoples Financial Services’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
KeyCorp 24.74% 13.26% 1.34%
Peoples Financial Services 25.35% 9.07% 1.10%

Risk & Volatility

KeyCorp has a beta of 1.22, indicating that its stock price is 22% more volatile than the S&P 500. Comparatively, Peoples Financial Services has a beta of 0.38, indicating that its stock price is 62% less volatile than the S&P 500.

Analyst Ratings

This is a summary of recent recommendations and price targets for KeyCorp and Peoples Financial Services, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
KeyCorp 2 7 12 0 2.48
Peoples Financial Services 0 0 0 0 N/A

KeyCorp presently has a consensus price target of $22.73, indicating a potential upside of 51.83%. Given KeyCorp’s higher possible upside, equities analysts clearly believe KeyCorp is more favorable than Peoples Financial Services.

Insider and Institutional Ownership

80.9% of KeyCorp shares are held by institutional investors. Comparatively, 24.3% of Peoples Financial Services shares are held by institutional investors. 0.7% of KeyCorp shares are held by insiders. Comparatively, 7.7% of Peoples Financial Services 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.

Summary

KeyCorp beats Peoples Financial Services on 10 of the 15 factors compared between the two stocks.

KeyCorp Company Profile

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.

Peoples Financial Services Company Profile

Peoples Financial Services Corp. operates as the bank holding company for Peoples Security Bank and Trust Company that provides financial services. The company accepts money market, NOW, savings, individual retirement, and demand deposit accounts, as well as certificates of deposit. Its loan products include residential real estate, automobile, manufactured housing, personal, student, home equity, and credit card loans; and commercial real estate, working capital, construction, small business administration, and agricultural loans, as well as loans for equipment and other commercial needs, and mineral rights. The company also offers investment management, IRA trustee, estate administration, living and life insurance trusts, trustee under will, guardianship, custodial/IRA custodial, and corporate trusts services, as well as pension and profit sharing plans. In addition, it provides investment portfolio management, estate and business succession planning, annuities, insurance, education funding strategies, and tax planning; and securities and brokerage, and investor services. Further, the company offers small business checking accounts, merchant money market accounts, online and telephone banking, business credit cards, merchant line of credit, and financial checkup services. Additionally, it provides remote deposit capture, cash management, night depository, and direct deposit, and official check services, as well as automatic clearing house transactions, automated teller machines, point of sale transactions, and safe deposit boxes. The company serves business, governmental, professional, and retail customers, as well as non-profits and municipal agencies through 27 full-service community banking offices located in Lackawanna, Lehigh, Luzerne, Monroe, Montgomery, Northampton, Susquehanna, Wayne, and Wyoming Counties of Pennsylvania; and Broome County of New York. Peoples Financial Services Corp. was founded in 1905 and is headquartered in Scranton, Pennsylvania.

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