Q: Both PPL and KEY are recieving positive recommendations form analysts. PPl looks cheaper on valuation. Both have similar dividends. If investing new money, which would you choose?
5i Research Answer:
PPL is $33.7B, with a 4.75% dividend, P/E of 28.6X, and dividend payout 51%. Revenue is expected to decline this year but EPS is expected to grow by 19%. KEY is $9.7B, with a 4.9%, P/E 18.9X, payout 42%. Revenue and EPS is expected to actuallly fall slightly this year. Given the significant size advantage, and similar yield and valuation along with better growth forecasts we would pick PPL today.