Financial Survey: Simmons First National (NASDAQ:SFNC) and KeyCorp (NYSE:KEY)

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

Earnings and Valuation

This table compares KeyCorp and Simmons First National”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
KeyCorp	$10.40 billion	1.52	$967.00 million	$0.79	21.24
Simmons First National	$755.35 million	3.57	$175.06 million	$1.33	16.17

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

Analyst Recommendations

This is a summary of current recommendations for KeyCorp and Simmons First National, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
KeyCorp	0	6	11	0	2.65
Simmons First National	1	3	0	0	1.75

KeyCorp presently has a consensus price target of $16.91, indicating a potential upside of 0.79%. Simmons First National has a consensus price target of $21.75, indicating a potential upside of 1.12%. Given Simmons First National’s higher probable upside, analysts clearly believe Simmons First National is more favorable than KeyCorp.

Dividends

KeyCorp pays an annual dividend of $0.82 per share and has a dividend yield of 4.9%. Simmons First National pays an annual dividend of $0.84 per share and has a dividend yield of 3.9%. KeyCorp pays out 103.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Simmons First National pays out 63.2% of its earnings in the form of a dividend. KeyCorp has raised its dividend for 13 consecutive years and Simmons First National has raised its dividend for 13 consecutive years.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
KeyCorp	7.35%	8.64%	0.54%
Simmons First National	10.49%	5.33%	0.66%

Volatility & Risk

KeyCorp has a beta of 1.25, meaning that its share price is 25% more volatile than the S&P 500. Comparatively, Simmons First National has a beta of 0.87, meaning that its share price is 13% less volatile than the S&P 500.

Insider and Institutional Ownership

79.7% of KeyCorp shares are held by institutional investors. Comparatively, 27.6% of Simmons First National shares are held by institutional investors. 0.6% of KeyCorp shares are held by insiders. Comparatively, 1.9% of Simmons First National shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Summary

KeyCorp beats Simmons First National on 9 of the 16 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 Simmons First National

Simmons First National Corporation operates as the holding company for Simmons Bank that provides banking and other financial products and services to individuals and businesses. The company offers checking, savings, and time deposits; consumer, real estate, and commercial loans; agricultural finance, equipment, and small business administration lending; trust and fiduciary services; credit cards; investment management products; treasury management; insurance products; and securities and investment services. It also provides ATM services; Internet and mobile banking platforms; overdraft facilities; and safe deposit boxes. The company was founded in 1903 and is headquartered in Pine Bluff, Arkansas.