Head-To-Head Contrast: KeyCorp (NYSE:KEY) versus BankUnited (NYSE:BKU)

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

Dividends

BankUnited pays an annual dividend of $1.24 per share and has a dividend yield of 3.3%. KeyCorp pays an annual dividend of $0.82 per share and has a dividend yield of 4.5%. BankUnited pays out 38.5% of its earnings in the form of a dividend. KeyCorp pays out -482.4% 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. BankUnited has increased its dividend for 4 consecutive years. KeyCorp is clearly the better dividend stock, given its higher yield and lower payout ratio.

Earnings and Valuation

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
BankUnited	$2.02 billion	1.40	$232.47 million	$3.22	11.68
KeyCorp	$9.24 billion	2.16	-$161.00 million	($0.17)	-107.18

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
BankUnited	12.26%	8.66%	0.69%
KeyCorp	-0.12%	9.43%	0.74%

Insider & Institutional Ownership

99.7% of BankUnited shares are owned by institutional investors. Comparatively, 79.7% of KeyCorp shares are owned by institutional investors. 1.2% of BankUnited shares are owned by company insiders. Comparatively, 0.5% of KeyCorp shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Volatility & Risk

BankUnited has a beta of 1.29, meaning that its stock price is 29% more volatile than the S&P 500. Comparatively, KeyCorp has a beta of 1.11, meaning that its stock price is 11% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of current recommendations and price targets for BankUnited and KeyCorp, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
BankUnited	1	7	4	0	2.25
KeyCorp	0	11	9	1	2.52

BankUnited currently has a consensus target price of $40.33, indicating a potential upside of 7.21%. KeyCorp has a consensus target price of $18.97, indicating a potential upside of 4.14%. Given BankUnited’s higher possible upside, research analysts plainly believe BankUnited is more favorable than KeyCorp.

About BankUnited

BankUnited, Inc. operates as the bank holding company for BankUnited, a national banking association that provides a range of banking services in the United States. The company offers deposit products, such as checking, money market deposit, and savings accounts; certificates of deposit; and treasury, commercial payment, and cash management services. Its loans portfolio includes commercial loans, including equipment loans, secured and unsecured lines of credit, formula-based lines of credit, owner-occupied commercial real estate term loans and lines of credit, mortgage warehouse lines, subscription finance facilities, letters of credit, commercial credit cards, small business administration and U.S. department of agriculture product offerings, export-import bank financing products, trade finance, and business acquisition finance credit facilities; commercial real estate loans; residential mortgages; and other consumer loans. The company offers online, mobile, and telephone banking services. It operates through a network of banking centers located in Florida counties and the New York metropolitan area, as well as Dallas, Texas. The company was formerly known as BU Financial Corporation. BankUnited, Inc. was incorporated in 2009 and is headquartered in Miami Lakes, Florida.

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.