Back to top

Analyst Blog

This page is temporarily not available.  Please check later as it should be available shortly. If you have any questions, please email customer support at support@zacks.com or call 800-767-3771 ext.  9339.

Following the approval its capital plan in Mar 2013, KeyCorp (KEY - Analyst Report) announced a 10% hike in its quarterly dividend. The Federal Reserve had sanctioned the company’s capital plan under the 2013 Comprehensive Capital Analysis and Review (CCAR).

KeyCorp declared a quarterly cash dividend of 5.5 cents per share. The dividend will be paid on Jun 14 to shareholders of record on May 28.

Moreover, KeyCorp’s capital plan includes share repurchase program worth $426 million. The company intends to complete the buyback of shares by the end of first-quarter 2014, through either the open market or privately-negotiated transactions.

Further, KeyCorp declared that it received the Fed’s approval for additional capital deployment through share purchases from the sale of Victory Capital Management and Victory Capital Advisors to Crestview Partners – a private equity firm. The divestiture, announced in Feb 2013, will likely be completed by third quarter-end. Of the total sale price, $201 million is in cash, while the remaining $45 million is a seller note, whose final value will be determined by the end of the year.

The Fed’s consent pertains to the after-tax net gain on the cash amount of the sale. KeyCorp anticipates after-tax gain to range from $120–$125 million. The company plans to request for more capital deployment on the after-tax gains related to the final value of the seller’s note in 2014.

Concurrently, KeyCorp announced a dividend of $1.9375 per share on 7.750% Non-Cumulative Perpetual Convertible Preferred Stock, Series A. This dividend will be paid on Jun 17, to shareholders of record as of May 31, for the period from Mar 15 to Jun 15.

Apart from KeyCorp, other banks that increased their dividends after the Fed’s approval include SunTrust Banks, Inc. (STI - Analyst Report), Capital One Financial Corporation (COF - Analyst Report) and Zions Bancorp. (ZION - Analyst Report). Capital One hiked its dividend 500% to 30 cents per share, SunTrust 100% to 10 cents and Zions 300% to 4 cents.

We believe that the latest boost in KeyCorp’s dividend reflects its commitment to return value to shareholders through its strong cash generation capabilities. Moreover, the company has a healthy capital and liquidity level.

Currently, KeyCorp carries a Zacks Rank #3 (Hold).

Please login to Zacks.com or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research

Close

Are you a new Zacks Member or a visitor to Zacks.com?

Top Zacks Features

Learn more

Start for as little as $4.50 per trade.

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Zacks.com. Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
DIXIE GRP IN DXYN 15.84 +7.90%
BOFI HLDG IN BOFI 85.30 +4.97%
RAMBUS INC RMBS 12.31 +4.41%
VIPSHOP HOLD VIPS 148.73 +4.35%
NETFLIX INC NFLX 345.74 +4.32%