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Shares of KeyCorp (KEY - Analyst Report) crafted a new 52-week high, touching $11.06 in the final hour of the trading session on Jun 10, 2013. The closing price of this financial holding company represents a solid year-to-date return of 26.5%. The trading volume for the session was 15.3 million shares, substantially higher than the average 10.3 million over the last 3 months.  

Despite hitting its 52-week high, this Zacks Rank #3 (Hold) stock has plenty of upside left given its strong estimate revisions over the last 60 days and expected year-over-year earnings growth of 0.72% for 2013.

Growth Drivers

The recent dividend hike, impressive first-quarter 2013 results and capital deployment activities were the primary growth drivers.

On May 16, KeyCorp announced a 10% hike in its quarterly dividend, following the approval of its 2013 capital plan in March. KeyCorp declared a quarterly cash dividend of 5.5 cents per share to be paid on Jun 14 to shareholders of record on May 28. Moreover, KeyCorp’s capital plan included a share repurchase program worth $426 million to be completed by the end of first-quarter 2014.

On Apr 18, KeyCorp reported adjusted first-quarter 2013 earnings of 22 cents per share. This was marginally ahead of the Zacks Consensus Estimate as well as the year-ago earnings of 20 cents. Results were aided by a rise in net interest income and almost stable operating expenses, partially offset by a fall in fee income. Moreover, continued improvement in asset quality and strong capital ratios were the other highlights of the quarter.

Moreover, KeyCorp has delivered positive earnings surprises in the 3 of the last 4 quarters with an average beat of 9.4%.

Estimate Revisions Show Strength

Over the last 60 days, 7 out of 19 estimates for 2013 have been revised upward, lifting the Zacks Consensus Estimate by 4.7% to 89 cents per share. For 2014, 7 out of 19 estimates moved higher over the same time frame, helping the Zacks Consensus Estimate advance 2.1% to 97 cents per share.   

Some banks that are worth considering include Enterprise Financial Services Corp. (EFSC - Snapshot Report), Old Second Bancorp Inc. (OSBC - Snapshot Report) and Privatebancorp Inc. (PVTB - Snapshot Report). All these companies carry a Zacks Rank #1 (Strong Buy).

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