Head-To-Head Comparison: Bank of Montreal (BMO) vs. KeyCorp (KEY)

Bank of Montreal (NYSE: BMO) and KeyCorp (NYSE:KEY) are both large-cap finance companies, but which is the superior stock? We will compare the two businesses based on the strength of their institutional ownership, analyst recommendations, dividends, profitability, valuation, risk and earnings.

Valuation and Earnings

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

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Bank of Montreal $21.48 billion 2.36 $4.09 billion $6.05 12.92
KeyCorp $6.87 billion 3.28 $1.30 billion $1.26 16.71

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

Dividends

Bank of Montreal pays an annual dividend of $2.93 per share and has a dividend yield of 3.7%. KeyCorp pays an annual dividend of $0.42 per share and has a dividend yield of 2.0%. Bank of Montreal pays out 48.4% of its earnings in the form of a dividend. KeyCorp pays out 33.3% 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. Bank of Montreal has increased its dividend for 7 consecutive years. Bank of Montreal is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Insider & Institutional Ownership

44.6% of Bank of Montreal shares are owned by institutional investors. Comparatively, 81.1% of KeyCorp shares are owned by institutional investors. 1.0% of Bank of Montreal shares are owned by company insiders. Comparatively, 0.7% of KeyCorp shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Analyst Ratings

This is a summary of current ratings and target prices for Bank of Montreal and KeyCorp, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Bank of Montreal 0 3 4 0 2.57
KeyCorp 1 5 16 0 2.68

Bank of Montreal presently has a consensus price target of $101.50, indicating a potential upside of 29.81%. KeyCorp has a consensus price target of $22.03, indicating a potential upside of 4.64%. Given Bank of Montreal’s higher probable upside, equities analysts clearly believe Bank of Montreal is more favorable than KeyCorp.

Volatility & Risk

Bank of Montreal has a beta of 1.04, suggesting that its share price is 4% more volatile than the S&P 500. Comparatively, KeyCorp has a beta of 1.04, suggesting that its share price is 4% more volatile than the S&P 500.

Profitability

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

Net Margins Return on Equity Return on Assets
Bank of Montreal 19.00% 14.11% 0.79%
KeyCorp 18.06% 10.66% 1.10%

Summary

Bank of Montreal beats KeyCorp on 9 of the 16 factors compared between the two stocks.

Bank of Montreal Company Profile

Bank of Montreal (the Bank) is a financial services provider. The Bank provides a range of personal and commercial banking, wealth management and investment banking products and services. The Bank conducts its business through three operating groups: Personal and Commercial Banking (P&C), Wealth Management and BMO Capital Markets. The P&C business includes two retail and business banking operating segments, such as Canadian Personal and Commercial Banking (Canadian P&C), and the United States Personal and Commercial Banking (U.S. P&C). The Bank’s Wealth Management business serves a range of client segments, from mainstream to ultra-high net worth and institutional, with an offering of wealth management products and services, including insurance. BMO Capital Markets is a North American-based financial services provider offering a range of products and services to corporate, institutional and government clients. The Bank has over 1,500 bank branches in Canada and the United States.

KeyCorp Company Profile

KeyCorp is a bank holding company. The Company is a bank-based financial services company. The Company operates through its subsidiary, KeyBank National Association (KeyBank), which is engaged in providing banking services. Through KeyBank and other subsidiaries, it provides a range of retail and commercial banking, commercial leasing, investment management, consumer finance, and investment banking products and services to individual, corporate and institutional clients. Its segments include Key Community Bank and Key Corporate Bank. Key Community Bank serves individuals and small to mid-sized businesses by offering a range of deposit, investment, lending, credit card, and personalized wealth management products and business advisory services. Key Corporate Bank is a full-service corporate and investment bank focused on serving the needs of middle market clients in industry sectors, which include consumer, energy, healthcare, industrial, public sector, real estate and technology.

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