Shinhan Financial Group (NYSE:SHG) & KeyCorp (NYSE:KEY) Financial Survey

Shinhan Financial Group (NYSE:SHG) and KeyCorp (NYSE:KEY) are both large-cap finance companies, but which is the superior business? We will contrast the two companies based on the strength of their dividends, profitability, risk, valuation, institutional ownership, analyst recommendations and earnings.

Insider & Institutional Ownership

7.8% of Shinhan Financial Group shares are held by institutional investors. Comparatively, 79.7% of KeyCorp shares are held by institutional investors. 1.0% of Shinhan Financial Group shares are held by company insiders. Comparatively, 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.

Analyst Ratings

This is a summary of current recommendations and price targets for Shinhan Financial Group and KeyCorp, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Shinhan Financial Group	0	0	1	0	3.00
KeyCorp	0	6	11	0	2.65

KeyCorp has a consensus target price of $15.97, indicating a potential upside of 17.42%. Given KeyCorp’s higher possible upside, analysts plainly believe KeyCorp is more favorable than Shinhan Financial Group.

Profitability

This table compares Shinhan Financial Group and KeyCorp’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Shinhan Financial Group	12.76%	7.23%	0.59%
KeyCorp	7.53%	8.89%	0.54%

Dividends

Shinhan Financial Group pays an annual dividend of $1.22 per share and has a dividend yield of 3.6%. KeyCorp pays an annual dividend of $0.82 per share and has a dividend yield of 6.0%. Shinhan Financial Group pays out 20.1% of its earnings in the form of a dividend. KeyCorp pays out 103.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. KeyCorp has increased its dividend for 13 consecutive years. KeyCorp is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Risk & Volatility

Shinhan Financial Group has a beta of 0.93, suggesting that its stock price is 7% less volatile than the S&P 500. Comparatively, KeyCorp has a beta of 1.28, suggesting that its stock price is 28% more volatile than the S&P 500.

Valuation & Earnings

This table compares Shinhan Financial Group and KeyCorp’s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Shinhan Financial Group	$25.42 billion	0.68	$3.49 billion	$6.07	5.59
KeyCorp	$10.40 billion	1.23	$967.00 million	$0.79	17.22

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

Summary

KeyCorp beats Shinhan Financial Group on 9 of the 17 factors compared between the two stocks.

About Shinhan Financial Group

Shinhan Financial Group Co., Ltd. provides financial products and services in South Korea and internationally. The company operates through six segments: Banking, Credit Card, Securities, Insurance, Credit, and Others. It offers retail banking services, including demand, savings, and fixed deposit-taking; checking accounts; mortgage and home equity, and retail lending; electronic banking and automatic teller machines (ATM); and bill paying, payroll and check-cashing, currency exchange, and wire fund transfer services. The company also provides corporate banking services, such as investment banking, real estate financing, overseas real estate and development project financing, infrastructure and structured financing, equity/venture investments, mergers and acquisitions consulting; securitization and derivatives services comprising securities and derivative products, and foreign exchange trading; business expansion financing and consulting services; and working capital loans and facilities loans. In addition, it is involved in treasury and investment activities in international capital markets consisting of foreign currency-denominated securities trading, foreign exchange trading and services, trade-related financial services, international factoring services, and foreign banking operations. Further, the company offers real estate trust, investment advisory, venture business investment, life and non-life insurance, trust account management, securities brokerage, and asset management services, as well as leasing and equipment financing, savings banking, loan collection and credit reporting, collective investment administration, private equity investment, and financial system development services. Additionally, it provides transaction history inquiries and fund transfers, opening letters of credit, trade finance, payment and collection management, sales and acquisition settlement, business-to-business settlement, sweeping, pooling, ERP interface, host-to-host banking, SWIFT SCORE, and cash and liquidity management service. Shinhan Financial Group Co., Ltd. was founded in 1982 and is headquartered in Seoul, South Korea.

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.