KeyCorp (NYSE:KEY) & BankUnited (NYSE:BKU) Head-To-Head Analysis

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

Volatility and Risk

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

Dividends

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

Earnings & Valuation

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
KeyCorp	$9.24 billion	2.17	-$161.00 million	($0.17)	-107.61
BankUnited	$1.03 billion	2.74	$232.47 million	$3.22	11.62

BankUnited has lower revenue, but higher earnings 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.

Institutional and Insider Ownership

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

Profitability

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

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

Analyst Recommendations

This is a summary of current ratings for KeyCorp and BankUnited, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
KeyCorp	0	10	11	0	2.52
BankUnited	1	7	4	0	2.25

KeyCorp currently has a consensus target price of $19.18, indicating a potential upside of 4.87%. BankUnited has a consensus target price of $40.58, indicating a potential upside of 8.50%. Given BankUnited’s higher possible upside, analysts clearly believe BankUnited is more favorable than KeyCorp.

Summary

BankUnited beats KeyCorp on 10 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 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.