Critical Review: First Bancorp (NASDAQ:FNLC) & KeyCorp (NYSE:KEY)

First Bancorp (NASDAQ:FNLCGet Rating) and KeyCorp (NYSE:KEYGet Rating) are both finance companies, but which is the superior business? We will contrast the two companies based on the strength of their dividends, institutional ownership, valuation, profitability, analyst recommendations, earnings and risk.

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 37.60% 15.32% 1.46%
KeyCorp 33.32% 15.93% 1.37%

Analyst Ratings

This is a summary of recent ratings and recommmendations for First Bancorp and KeyCorp, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
First Bancorp 0 0 0 0 N/A
KeyCorp 0 5 8 0 2.62

KeyCorp has a consensus target price of $27.15, suggesting a potential upside of 32.55%. Given KeyCorp’s higher probable upside, analysts plainly believe KeyCorp is more favorable than First Bancorp.

Dividends

First Bancorp pays an annual dividend of $1.28 per share and has a dividend yield of 4.4%. KeyCorp pays an annual dividend of $0.78 per share and has a dividend yield of 3.8%. First Bancorp pays out 38.8% of its earnings in the form of a dividend. KeyCorp pays out 29.7% 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 2 consecutive years and KeyCorp has increased its dividend for 11 consecutive years.

Risk and Volatility

First Bancorp has a beta of 0.55, meaning that its stock price is 45% less volatile than the S&P 500. Comparatively, KeyCorp has a beta of 1.32, meaning that its stock price is 32% more volatile than the S&P 500.

Earnings and Valuation

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

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
First Bancorp $96.46 million 3.32 $36.27 million $3.30 8.80
KeyCorp $7.56 billion 2.49 $2.63 billion $2.63 7.79

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

Institutional and Insider Ownership

38.9% of First Bancorp shares are owned by institutional investors. Comparatively, 82.8% of KeyCorp shares are owned by institutional investors. 5.8% of First Bancorp shares are owned by company insiders. Comparatively, 0.5% of KeyCorp shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Summary

KeyCorp beats First Bancorp on 9 of the 16 factors compared between the two stocks.

About First Bancorp (Get Rating)

The First Bancorp, Inc. operates as the holding company for First National Bank that provides a range of banking products and services to individuals and businesses. It offers various deposit products, including demand, NOW, savings, money market, and certificates of deposit accounts. The company also provides commercial real estate loan products, such as mortgage loans to finance investments in real property comprising multi-family residential, commercial/retail, office, industrial, hotel, educational, and other specific or mixed use properties; commercial construction loans to finance construction of owner- and non-owner occupied commercial real estate properties; and other commercial loans, which include revolving and term loan obligations to business and corporate enterprises for the purpose of financing working capital or capital investment. In addition, it offers municipal loans for capitalized expenditures, construction projects, or tax-anticipation notes; residential term loans that include amortizing home mortgages and construction loans, which include loans for owner-occupied residential construction; home equity loans and lines of credit; and consumer loans, which are amortizing loans to individuals collateralized by automobiles, pleasure crafts, and recreation vehicles, as well as unsecured short-term time notes. Further, the company provides private banking, financial planning, investment management, and trust services to individuals, businesses, non-profit organizations, and municipalities, as well as payment processing services. It operates through 18 full-service banking offices in Lincoln, Knox, Waldo, Penobscot, Hancock, and Washington counties in the Mid-Coast, Eastern, and Down East regions of Maine. The company was formerly known as First National Lincoln Corporation and changed its name to The First Bancorp, Inc. in April 2008. The First Bancorp, Inc. was founded in 1864 and is based in Damariscotta, Maine.

About KeyCorp (Get Rating)

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; and personal finance and financial wellness, student loan refinancing, mortgage and home equity, lending, credit card, treasury, business advisory, wealth management, asset management, investment, 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 comprising consumer, energy, healthcare, industrial, public sector, real estate, and technology loans for middle market clients. In addition, the company offers community development financing, securities underwriting, brokerage, and investment banking services. As of December 31, 2021, it operated through a network of approximately 999 branches and 1,317 ATMs 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.

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