Keycorp /New/ (NYSE: KEY)

Sector: Financial Services Industry: Banks - Regional CIK: 0000091576
Market Cap 23.85 Bn
P/B 1.19
P/E 25.59
P/S 4.02
ROIC (Qtr) 2.99
Div Yield % 4.94
Rev 1y % (Qtr) 202.55
Total Debt (Qtr) 12.27 Bn
Debt/Equity (Qtr) 0.61

About

KeyCorp, also known as KeyBank, is a prominent player in the banking and financial services industry with consolidated total assets of approximately $188.3 billion as of December 31, 2023. The company operates through two main business segments: Consumer Bank and Commercial Bank, with its headquarters located in Cleveland, Ohio. As one of the largest bank-based financial services companies in the United States, KeyCorp offers a variety of products and services to its customers, which include deposit and investment products, personal finance and...

Read more

Price action

Investment thesis

Bull case

  • Strong tangible asset base of 184.64B provides 15.05x coverage of total debt 12.27B, indicating robust asset backing and low credit risk.
  • Operating cash flow of 3.22B provides exceptional 22.50x coverage of minority interest expenses 143M, showing strong core operations.
  • Operating cash flow of 3.22B provides strong 25.33x coverage of stock compensation 127M, indicating sustainable incentive practices.
  • Robust free cash flow of 3.15B exceeds capital expenditure of 70M by 44.96x, indicating strong organic growth funding capability.
  • Cash position of 1.94B provides exceptional 13.55x coverage of minority interest expenses 143M, indicating strong liquidity.

Bear case

  • Operating cash flow of 3.22B provides thin coverage of dividend payments of (1.03B) with a -3.12 ratio, suggesting potential dividend sustainability issues if operational performance deteriorates.
  • Free cash flow of 3.15B represents just -0.54x of debt issuance (5.88B), suggesting concerning reliance on leverage rather than internal cash generation for growth.
  • Retained earnings of 15.11B provide limited buffer against comprehensive income items of (2.15B), which is -7.03x, indicating elevated exposure to market risks.
  • R&D investment of 0 represents just 0x of SG&A expenses of 3.92B, indicating potential underinvestment in innovation relative to administrative overhead.
  • Deposit liabilities of 150.76B significantly exceed cash reserves of 1.94B, which is 77.79x, indicating potential liquidity risk in stress scenarios.

Peer comparison

Companies in the Banks - Regional
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 USB Us Bancorp \De\ 84.44 Bn 12.40 3.25 77.98 Bn
2 PNC Pnc Financial Services Group, Inc. 84.36 Bn 13.61 3.73 62.34 Bn
3 NU Nu Holdings Ltd. 81.47 Bn 32.21 5.79 4.49 Bn
4 NWG NatWest Group plc 66.53 Bn 9.88 3.05 169.04 Bn
5 TFC Truist Financial Corp 64.60 Bn 13.18 3.53 71.11 Bn
6 MTB M&T Bank Corp 32.73 Bn 12.47 3.60 14.99 Bn
7 FITB Fifth Third Bancorp 31.96 Bn 14.15 3.93 18.94 Bn
8 FCNCA First Citizens Bancshares Inc /De/ 28.98 Bn 12.78 3.26 40.00 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 0.20 0.14
EV to Cash from Ops. EV/CFO 11.48 7.21
EV to Debt EV to Debt 3.01 5.20
EV to EBIT EV/EBIT 33.57 14.98
EV to EBITDA EV/EBITDA 29.17 8.92
EV to Free Cash Flow [EV/FCF] EV/FCF 11.73 8.87
EV to Market Cap EV to Market Cap 1.55 1.04
EV to Revenue EV/Rev 6.22 -3.76
Price to Book Value [P/B] P/B 1.19 1.17
Price to Earnings [P/E] P/E 25.59 15.63
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) 0.90 271.44
Dividend Payout Ratio % Div Payout % (Qtr) 101.20 35.28
Dividend per Basic Share Div per Share (Qtr) 0.82 0.89
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 28.68 34.52
Interest Coverage Interest Coverage 0.00 -0.05
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) 4.11 -73.15
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 51.88 15.78
Dividend Growth (1y) % Div 1y % (Qtr) 0.00 5.32
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 18,540.00 110.93
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 377.74 38.80
EBIT Growth (1y) % EBIT 1y % (Qtr) 4,682.61 61.46
EBT Growth (1y) % EBT 1y % (Qtr) 4,682.61 61.37
EPS Growth (1y) % EPS 1y % (Qtr) 8,000.00 76.34
FCF Growth (1y) % FCF 1y % (Qtr) 3,278.79 161.72
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 22.30 14.15
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.03 0.04
Cash Payout Ratio Cash Payout (Qtr) 0.31 0.26
Cash Ratio Cash Ratio 0.00 0.00
Current Ratio Current Ratio 0.00 0.01
Debt to Equity Ratio Debt/Equity (Qtr) 0.61 0.53
Interest Cover Ratio Interest Cover Ratio 0.00 -0.05
Times Interest Earned Times Interest Earned 0.00 -0.05
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 18.90 147.97
EBIT Margin % EBIT Margin % (Qtr) 18.54 155.41
EBT Margin % EBT Margin % (Qtr) 18.54 154.66
Gross Margin % Gross Margin % (Qtr) 100.00 97.82
Net Profit Margin % Net Margin % (Qtr) 15.70 115.63