Reviewing KeyCorp (NYSE:KEY) & State Street (NYSE:STT)

KeyCorp (NYSE:KEY) and State Street (NYSE:STT) are both large-cap finance companies, but which is the superior business? We will compare the two businesses based on the strength of their risk, institutional ownership, analyst recommendations, dividends, valuation, earnings and profitability.

Analyst Ratings

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

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
KeyCorp	0	11	10	0	2.48
State Street	1	3	8	0	2.58

KeyCorp currently has a consensus price target of $19.39, indicating a potential upside of 1.76%. State Street has a consensus price target of $114.18, indicating a potential upside of 0.70%. Given KeyCorp’s higher probable upside, analysts clearly believe KeyCorp is more favorable than State Street.

Risk & Volatility

KeyCorp has a beta of 1.15, meaning that its share price is 15% more volatile than the S&P 500. Comparatively, State Street has a beta of 1.5, meaning that its share price is 50% more volatile than the S&P 500.

Valuation & Earnings

This table compares KeyCorp and State Street”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
KeyCorp	$9.24 billion	2.26	-$161.00 million	($0.07)	-272.29
State Street	$22.13 billion	1.45	$2.69 billion	$8.93	12.70

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
KeyCorp	1.49%	9.65%	0.82%
State Street	12.59%	12.96%	0.83%

Dividends

KeyCorp pays an annual dividend of $0.82 per share and has a dividend yield of 4.3%. State Street pays an annual dividend of $3.04 per share and has a dividend yield of 2.7%. KeyCorp pays out -1,171.4% of its earnings in the form of a dividend. State Street pays out 34.0% 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. State Street has increased its dividend for 13 consecutive years. KeyCorp is clearly the better dividend stock, given its higher yield and lower payout ratio.

Insider and Institutional Ownership

79.7% of KeyCorp shares are owned by institutional investors. Comparatively, 87.4% of State Street shares are owned by institutional investors. 0.5% of KeyCorp shares are owned by company insiders. Comparatively, 0.3% of State Street shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Summary

State Street beats KeyCorp 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; 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.

About State Street

State Street Corporation, through its subsidiaries, provides a range of financial products and services to institutional investors worldwide. The company offers investment servicing products and services, including custody, accounting, regulatory reporting, investor, and performance and analytics; middle office products, such as IBOR, transaction management, loans, cash, derivatives and collateral, record keeping, and client reporting and investment analytics; finance leasing; foreign exchange, and brokerage and other trading services; securities finance and enhanced custody products; deposit and short-term investment facilities; investment manager and alternative investment manager operations outsourcing; performance, risk, and compliance analytics; and financial data management to support institutional investors. It also engages in the provision of portfolio management and risk analytics, as well as trading and post-trade settlement services with integrated compliance and managed data. In addition, the company offers investment management strategies and products, such as core and enhanced indexing, multi-asset strategies, active quantitative and fundamental active capabilities, and alternative investment strategies. Further, it provides services and solutions, including environmental, social, and governance investing; defined benefit and defined contribution; and global fiduciary solutions, as well as exchange-traded funds under the SPDR ETF brand. The company provides its products and services to mutual funds, collective investment funds, UCITS, hedge funds and other investment pools, corporate and public retirement plans, insurance companies, foundations, endowments, and investment managers. State Street Corporation was founded in 1792 and is headquartered in Boston, Massachusetts.