KeyCorp (KEY) is shining bright amongst the stocks in the financial sector. All in all, KEY is up nearly 20% across the first three months of the year. KEY is a banking institution that provides all sorts of financial services and products ranging from home mortgages to investment management services, commercial banking services, and commercial leasing. It serves customers in 15 states. All in all, KEY has a network of 1,000+ branches.
Though few know it, KEY’s KeyBank National Association is officially a registered investment advisor. KEY’s trust company also provides corporate and personal trust services, mutual fund access, international banking services, and plenty more. Let’s take a closer look at KEY to determine whether it will continue to move upward or if its ascent is likely to transition to a plateau or even a decline.
KEY has a forward P/E ratio of 10.59. If you were to rewind time back to the 80s and 90s, a forward P/E ratio of 12 and under was considered attractive to investors. Nowadays, forward P/E ratios of 15 to 20 are considered reasonable. This means KEY is likely underpriced despite the fact that it is trading merely a couple of dollars below its 52-week high of $21.81. KEY investors are also treated to an annual dividend of 3.80%.
KEY was trading at $11.93 in September. The stock is now trading above $20. Go back a full year, and KEY was trading around $9 in early April. The rising economic tide is clearly lifting KEY’s boat. The economy is bouncing back, steering more home-seekers, businesses, and others toward banks such as KEY for loans. Though financials don’t have the same growth prospects as tech stocks, they are still worthy of your consideration.
Based in Ohio, KEY has $156 billion in assets. There has been some talk that KEY will be a takeover target in the months and years ahead. The fact that KEY operates in more than a dozen states certainly makes it that much more attractive to potential buyers. It is also interesting to note one-third of KEY revenue stems from non-interest income. KEY’s investment bank division rakes in more than $115 million in fees on a quarterly basis. In short, KEY is diversified both in terms of geography as well as revenue generation.
KEY According to Analysts
Analysts are enthusiastic about KEY’s future. Of the 19 analysts who have issued recommendations for the stock, two consider it a Strong Buy and four consider it a Buy. KEY has more upside potential than 20.86% of all stocks that qualify as large-caps. Furthermore, KEY has less analyst estimate variance than all but 19.81% of the stocks in the large-cap category, meaning the analysts are primarily on the same page with this stock.
KEY POWR Ratings
KEY has a B grade, which is a Buy rating in our POWR Ratings service. KEY also has a B grade in the Growth component of the POWR Ratings. Click here to learn more about how KEY fares in the rest of the components, such as Value, Sentiment, Quality, Stability, and Momentum.
Of the 11 publicly traded companies in the Money Center Banks industry, KEY is ranked first. You can find other top stocks in this industry by clicking here.
Will KEY Continue to Climb?
KEY should move higher as economic activity returns to normal. Though supposed financial experts predicted a significant number of bank loan defaults when the pandemic first started, KEY has weathered the storm quite admirably. The pandemic’s financial fallout has not been nearly as bad as anticipated for financials such as KEY, ultimately setting the stage for a rosy 2021.
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KEY shares fell $0.02 (-0.10%) in after-hours trading Wednesday. Year-to-date, KEY has gained 22.88%, versus a 6.35% rise in the benchmark S&P 500 index during the same period.
About the Author: Patrick Ryan
Patrick Ryan has more than a dozen years of investing experience with a focus on information technology, consumer and entertainment sectors. In addition to working for StockNews, Patrick has also written for Wealth Authority and Fallon Wealth Management. More...
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