NewtekOne (NASDAQ:NEWT) versus KeyCorp (NYSE:KEY) Critical Contrast

KeyCorp (NYSE:KEY) and NewtekOne (NASDAQ:NEWT) are both finance companies, but which is the superior investment? We will contrast the two companies based on the strength of their dividends, analyst recommendations, earnings, institutional ownership, valuation, profitability and risk.

Dividends

KeyCorp pays an annual dividend of $0.82 per share and has a dividend yield of 7.4%. NewtekOne pays an annual dividend of $0.72 per share and has a dividend yield of 3.9%. KeyCorp pays out 54.7% of its earnings in the form of a dividend. NewtekOne pays out 66.1% 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. KeyCorp has raised its dividend for 11 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 recommendations for KeyCorp and NewtekOne, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
KeyCorp	0	7	8	0	2.53
NewtekOne	0	2	1	0	2.33

KeyCorp presently has a consensus price target of $14.60, suggesting a potential upside of 31.18%. NewtekOne has a consensus price target of $17.50, suggesting a potential downside of 4.48%. Given KeyCorp’s stronger consensus rating and higher possible upside, analysts clearly believe KeyCorp is more favorable than NewtekOne.

Risk and Volatility

KeyCorp has a beta of 1.26, meaning that its stock price is 26% more volatile than the S&P 500. Comparatively, NewtekOne has a beta of 1.34, meaning that its stock price is 34% more volatile than the S&P 500.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
KeyCorp	14.93%	13.78%	0.80%
NewtekOne	15.62%	12.02%	2.99%

Earnings and Valuation

This table compares KeyCorp and NewtekOne’s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
KeyCorp	$8.13 billion	1.28	$1.92 billion	$1.50	7.42
NewtekOne	$141.71 million	3.19	$32.31 million	$1.09	16.81

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

Insider & Institutional Ownership

77.8% of KeyCorp shares are held by institutional investors. Comparatively, 36.1% of NewtekOne shares are held by institutional investors. 0.5% of KeyCorp shares are held by insiders. Comparatively, 6.4% of NewtekOne shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Summary

KeyCorp beats NewtekOne on 11 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 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. The company was founded in 1849 and is headquartered in Cleveland, Ohio.

About NewtekOne

NewtekOne, Inc., a financial holding company, provides a range of business and financial solutions to the small- and medium-sized business market. Its business and financial solutions include banking services, business lending, electronic payment processing, ecommerce, accounts receivable financing and inventory financing, insurance solutions, web services, and payroll and benefits solutions, as well as technology solutions, including cloud computing, data backup, storage, retrieval, and IT consulting. The company was founded in 1998 and is based in Boca Raton, Florida.