Analyzing Nicolet Bankshares (NYSE:NIC) and KeyCorp (NYSE:KEY)

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

Volatility & Risk

KeyCorp has a beta of 1.26, meaning that its share price is 26% more volatile than the S&P 500. Comparatively, Nicolet Bankshares has a beta of 0.77, meaning that its share price is 23% less volatile than the S&P 500.

Dividends

KeyCorp pays an annual dividend of $0.82 per share and has a dividend yield of 4.7%. Nicolet Bankshares pays an annual dividend of $1.12 per share and has a dividend yield of 0.9%. KeyCorp pays out -273.3% of its earnings in the form of a dividend. Nicolet Bankshares pays out 13.9% 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. KeyCorp is clearly the better dividend stock, given its higher yield and lower payout ratio.

Institutional & Insider Ownership

79.7% of KeyCorp shares are owned by institutional investors. Comparatively, 43.1% of Nicolet Bankshares shares are owned by institutional investors. 0.6% of KeyCorp shares are owned by insiders. Comparatively, 16.4% of Nicolet Bankshares shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Profitability

This table compares KeyCorp and Nicolet Bankshares’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
KeyCorp	-2.52%	8.73%	0.63%
Nicolet Bankshares	23.83%	10.95%	1.41%

Valuation and Earnings

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
KeyCorp	$9.24 billion	1.89	-$161.00 million	($0.30)	-58.70
Nicolet Bankshares	$520.63 million	3.45	$124.06 million	$8.03	14.72

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

Analyst Recommendations

This is a breakdown of recent ratings and target prices for KeyCorp and Nicolet Bankshares, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
KeyCorp	0	9	10	0	2.53
Nicolet Bankshares	0	3	2	0	2.40

KeyCorp presently has a consensus target price of $19.69, indicating a potential upside of 11.84%. Nicolet Bankshares has a consensus target price of $119.00, indicating a potential upside of 0.64%. Given KeyCorp’s stronger consensus rating and higher possible upside, equities analysts clearly believe KeyCorp is more favorable than Nicolet Bankshares.

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 Nicolet Bankshares

Nicolet Bankshares, Inc. operates as the bank holding company for Nicolet National Bank that provides banking products and services for businesses and individuals in Wisconsin and Michigan. The company accepts checking, savings, and money market accounts; various certificates of deposit; and individual retirement accounts. It also offers commercial loans, including commercial, industrial, and business loans and lines of credit; commercial real estate loans; agricultural (AG) production and AG real estate loans; commercial real estate investment real estate loans; construction and land development loans; residential real estate loans, such as residential first lien and junior lien mortgages, home equity loans, lines of credit, and residential construction loans; and consumer loans. In addition, the company provides cash management, international banking, personal brokerage, safe deposit boxes, and trust and fiduciary services, as well as wealth management and retirement plan services. Further, it offers mortgage refinancing; online services, such as commercial, retail, and trust online banking; automated bill payment, mobile banking deposits and account access, and remote deposit capture services; and other services consisting of wire transfers, debit cards, credit cards, pre-paid gift cards, direct deposits, and official bank checks, as well as facilitates crop insurance products. The company was formerly known as Green Bay Financial Corporation and changed its name to Nicolet Bankshares, Inc. in March 2002. The company was incorporated in 2000 and is headquartered in Green Bay, Wisconsin.