Contrasting Hanmi Financial (NASDAQ:HAFC) & KeyCorp (NASDAQ:KEY)

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

Valuation & Earnings

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

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Hanmi Financial $258.92 million 2.35 $57.87 million $1.90 10.31
KeyCorp $7.39 billion 2.60 $1.87 billion $1.73 11.26

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

Institutional and Insider Ownership

88.7% of Hanmi Financial shares are held by institutional investors. Comparatively, 80.1% of KeyCorp shares are held by institutional investors. 2.9% of Hanmi Financial shares are held by insiders. Comparatively, 0.1% of KeyCorp shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Risk & Volatility

Hanmi Financial has a beta of 1.21, indicating that its stock price is 21% more volatile than the S&P 500. Comparatively, KeyCorp has a beta of 1.32, indicating that its stock price is 32% more volatile than the S&P 500.

Profitability

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

Net Margins Return on Equity Return on Assets
Hanmi Financial 14.93% 7.77% 0.79%
KeyCorp 21.93% 12.71% 1.31%

Analyst Ratings

This is a breakdown of current ratings and price targets for Hanmi Financial and KeyCorp, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Hanmi Financial 0 1 0 0 2.00
KeyCorp 2 9 10 0 2.38

Hanmi Financial presently has a consensus price target of $21.50, suggesting a potential upside of 9.81%. KeyCorp has a consensus price target of $24.39, suggesting a potential upside of 25.23%. Given KeyCorp’s stronger consensus rating and higher possible upside, analysts clearly believe KeyCorp is more favorable than Hanmi Financial.

Dividends

Hanmi Financial pays an annual dividend of $0.96 per share and has a dividend yield of 4.9%. KeyCorp pays an annual dividend of $0.74 per share and has a dividend yield of 3.8%. Hanmi Financial pays out 50.5% of its earnings in the form of a dividend. KeyCorp pays out 42.8% 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. Hanmi Financial has raised its dividend for 5 consecutive years and KeyCorp has raised its dividend for 8 consecutive years.

Summary

KeyCorp beats Hanmi Financial on 13 of the 17 factors compared between the two stocks.

Hanmi Financial Company Profile

Hanmi Financial Corporation operates as the holding company for Hanmi Bank that provides business banking products and services in the United States. The company offers various deposit products, including noninterest-bearing checking accounts, interest-bearing checking and savings accounts, negotiable order of withdrawal accounts, money market accounts, and certificates of deposit. It also provides real estate loans, including commercial property, construction, and residential property loans; and commercial and industrial loans, such as commercial term loans and commercial lines of credit, as well as international finance, and trade services and products comprising letters of credit, and import and export financing. In addition, the company offers consumer loans that include automobile loans, secured and unsecured personal loans, home improvement loans, home equity lines of credit, unsecured lines of credit, and credit cards; and small business administration loans for business purposes, which comprise owner-occupied commercial real estate, business acquisitions, start-ups, franchise financing, working capital, improvements and renovations, inventory and equipment, and debt-refinancing, as well as equipment lease financing. As of January 24, 2019, it operated a network of 39 full-service branches and 9 loan production offices in California, Texas, Illinois, Virginia, New Jersey, New York, Colorado, Washington, and Georgia. The company was incorporated in 2000 and is headquartered in Los Angeles, California.

KeyCorp Company Profile

KeyCorp operates as the holding company for KeyBank National Association that provides various retail and commercial banking services in the United States. The company's Key Community Bank segment offers various deposit and investment products, personal finance services, residential mortgages, home equity loans, credit cards, and installment loans. It also purchases retail auto-sales contracts through a network of auto dealership; offers financial, estate and retirement planning, asset management, and trust services, as well as portfolio management, life insurance, charitable giving, and related services for high-net-worth clients. In addition, this segment provides deposits, investment and credit products, and business advisory services to small businesses; and commercial lending, cash management, equipment leasing, and investment products, as well as employee benefit programs, succession planning, capital market access, derivatives, and foreign exchange services to mid-sized businesses. Its Key Corporate Bank segment offers 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 for middle market clients comprising consumer, energy, healthcare, industrial, public, real estate, and technology sectors. The company also offers securities underwriting, investment banking, and brokerage services. As of December 31, 2018, it offered its products and services through 1,159 retail banking branches and 1,505 automated teller machines in 15 states, as well as additional offices, online and mobile banking capabilities, and a telephone banking call center. KeyCorp was founded in 1849 and is headquartered in Cleveland, Ohio.

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