Critical Survey: Finward Bancorp (NASDAQ:FNWD) and KeyCorp (NYSE:KEY)

Finward Bancorp (NASDAQ:FNWD) and KeyCorp (NYSE:KEY) 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.

Insider and Institutional Ownership

26.6% of Finward Bancorp shares are held by institutional investors. Comparatively, 79.7% of KeyCorp shares are held by institutional investors. 13.1% of Finward Bancorp shares are held by insiders. Comparatively, 0.6% of KeyCorp 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.

Volatility & Risk

Finward Bancorp has a beta of 0.16, meaning that its share price is 84% less volatile than the S&P 500. Comparatively, KeyCorp has a beta of 1.02, meaning that its share price is 2% more volatile than the S&P 500.

Dividends

Finward Bancorp pays an annual dividend of $0.48 per share and has a dividend yield of 1.1%. KeyCorp pays an annual dividend of $0.82 per share and has a dividend yield of 3.7%. Finward Bancorp pays out 21.1% of its earnings in the form of a dividend. KeyCorp pays out 47.7% 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.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Finward Bancorp	9.65%	5.68%	0.48%
KeyCorp	17.83%	11.23%	1.05%

Analyst Recommendations

This is a summary of current recommendations for Finward Bancorp and KeyCorp, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Finward Bancorp	0	1	2	0	2.67
KeyCorp	0	7	12	1	2.70

Finward Bancorp presently has a consensus price target of $41.00, indicating a potential downside of 6.61%. KeyCorp has a consensus price target of $49.14, indicating a potential upside of 123.81%. Given KeyCorp’s stronger consensus rating and higher probable upside, analysts clearly believe KeyCorp is more favorable than Finward Bancorp.

Valuation & Earnings

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Finward Bancorp	$101.06 million	1.88	$8.09 million	$2.27	19.34
KeyCorp	$11.23 billion	2.09	$1.83 billion	$1.72	12.77

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

Summary

KeyCorp beats Finward Bancorp on 13 of the 17 factors compared between the two stocks.

About Finward Bancorp

Finward Bancorp operates as the holding company for Peoples Bank that provides various banking products and services. The company’s deposit products include non-interest- and interest-bearing demand accounts, savings accounts, money market deposit accounts, certificate accounts, and retirement savings plans. Its loan products portfolio comprises residential mortgage loans that enable borrowers to purchase existing homes, refinance existing homes, or construct new homes; construction loans primarily to individuals and contractors; commercial real estate loans; consumer loans to individuals for personal, household, or family purposes; home equity line of credit; home improvement loans and equity loans; commercial business loans; government loans; and loans to municipalities. The company also offers estate and retirement planning, custodial services, guardianships, IRA accounts, and investment agency accounts, as well as serves as the personal representative of estates, and acts as trustee for revocable and irrevocable trusts. In addition, it provides insurance and annuity investments to wealth management customers; holds real estate properties; and operates as a real estate investment trust. The company was formerly known as NorthWest Indiana Bancorp and changed its name to Finward Bancorp in May 2021. Finward Bancorp was founded in 1916 and is headquartered in Munster, Indiana.

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.