Reviewing Nordea Bank (OTCMKTS:NRDBY) & KeyCorp (NYSE:KEY)

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

Dividends

KeyCorp pays an annual dividend of $0.82 per share and has a dividend yield of 3.8%. Nordea Bank pays an annual dividend of $0.35 per share and has a dividend yield of 1.7%. KeyCorp pays out 47.7% of its earnings in the form of a dividend. Nordea Bank pays out 21.7% 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.

Valuation and Earnings

This table compares KeyCorp and Nordea Bank”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
KeyCorp	$7.60 billion	3.07	$1.83 billion	$1.72	12.69
Nordea Bank	$23.46 billion	2.99	$5.48 billion	$1.61	12.82

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
KeyCorp	17.83%	11.23%	1.05%
Nordea Bank	22.82%	15.18%	0.71%

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for KeyCorp and Nordea Bank, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
KeyCorp	0	7	12	1	2.70
Nordea Bank	1	3	2	1	2.43

KeyCorp currently has a consensus target price of $49.14, indicating a potential upside of 125.05%. Given KeyCorp’s stronger consensus rating and higher probable upside, analysts clearly believe KeyCorp is more favorable than Nordea Bank.

Institutional & Insider Ownership

79.7% of KeyCorp shares are held by institutional investors. Comparatively, 0.0% of Nordea Bank shares are held by institutional investors. 0.6% of KeyCorp shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Volatility & Risk

KeyCorp has a beta of 1.02, meaning that its share price is 2% more volatile than the S&P 500. Comparatively, Nordea Bank has a beta of 0.63, meaning that its share price is 37% less volatile than the S&P 500.

Summary

KeyCorp beats Nordea Bank on 10 of the 16 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 Nordea Bank

Nordea Bank Abp offers banking products and services in Sweden, Finland, Norway, Denmark, and internationally. It operates through Personal Banking, Business Banking, Large Corporates & Institutions, and Asset & Wealth Management segments. The Personal Banking segment provides various financial services to customers through mobile banking, over the phone, online meetings, and branch offices. The Business Banking segment offers payments, cash management, cards, working capital management, and cards and finance solutions to corporate and personal customers. The Large Corporates & Institutions segment provides financing, cash management and payment, investment banking, capital market products, and securities services to corporate and institutional customers. The Asset & Wealth Management segment offers investment, savings, and risk management solutions to high net worth individuals and institutional investors. It also offers account-based products, such as lending and deposit; project finance services, asset-based financing through leasing, hire purchase, and factoring, as well as sales to finance partners, such as dealers, vendors, and retailers; financial instruments or arrangement for financial instruments, including currencies, commodities, stocks, and bonds; and asset management, including investment funds, discretionary management, portfolio advice, equity trading, and pension accounts, as well as life insurance and pension products and services. Nordea Bank Abp was founded in 1820 and is headquartered in Helsinki, Finland.