On Mar 10, 2014, we issued an updated research report on
). Moreover, the company reported better-than-expected
fourth-quarter 2013 results, based on improvement in fee income
and lower provisions.
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KeyCorp's fourth-quarter earnings per share surpassed the Zacks
Consensus Estimate by 16.7%. The results were mainly driven by
prudent expense management, higher non-interest income and
decreased provision for loan and lease losses. Additionally,
consistent improvement in asset quality, growth in loan and
deposit balances and strong capital ratios were the other
Further, KeyCorp is an asset for yield-seeking investors. In
2013, the company returned 76% of its earnings in the form of
dividends and share repurchases. We believe that steady capital
deployment activities will continue to boost investors'
confidence in the stock, going forward.
Over the last 60 days, the Zacks Consensus Estimate for 2014 has
remained stable at $1.02 per share while for 2015, it decreased
nearly 1% to $1.12 per share.
However, continued pressure on net interest margin remains a
concern for KeyCorp. We anticipate the margin pressure to
continue in the near term due to the soft new loan demand, low
interest rate environment and the company's asset sensitivity.
Also, with the changes in the financial services industry and
stringent regulations, KeyCorp's profitability will likely be
impacted due to increased costs and fee restrictions.
KeyCorp now has a Zacks Rank #3 (Hold).
Stocks That Warrant a Look
Some better-ranked banking stocks include
Fifth Third Bancorp
The PNC Financial Services Group, Inc.
Hancock Holding Co.
). All of these have a Zacks Rank #2 (Buy).