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KeyCorp (KEY) Stock Up on 5.1% Hike in Quarterly Dividend

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Shares of KeyCorp (KEY - Free Report) gained 1.1% in aftermarket trading in response to its board of directors’ approval of a hike in the quarterly cash dividend. The new dividend of 20.5 cents per share represents an increase of 5.1% from the prior payout. The dividend will be paid out on Dec 15 to shareholders on record as of Nov 29.

Considering the last day’s closing price, KEY’s dividend yield currently stands at 4.39%, which is impressive compared with the industry average of 3.38%. The yield is attractive for income investors and represents a steady income stream.

KEY has a record of continuously raising dividends. Prior to this hike, the company announced a dividend hike in November 2021. The dividend was increased from 18.5 cents per share to 19.5 cents.

KeyCorp has raised its quarterly dividend five times in the last five years. Also, it has a five-year annualized dividend growth rate of 10.7%. Currently, the company's payout ratio is 36% of earnings.

The company also has an efficient share repurchase plan. In July 2021, KEY announced a share repurchase authorization of up to $1.5 billion through the third quarter of 2022. Also, in October 2022, KeyCorp’s board of directors approved an extension of the remaining $790-million existing share repurchase program through the third quarter of 2023.

Supported by its earnings strength and solid balance sheet, the company is expected to continue with efficient capital deployment activities. Through this, KeyCorp will keep enhancing shareholder value.

Over the past six months, shares of KEY have gained 1.7%, underperforming 6.1% rally of the industry it belongs to.
 

Zacks Investment Research
Image Source: Zacks Investment Research

Currently, the company carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Dividend Hikes by Other Banks

Last month, banks like Prosperity Bancshares, Inc. (PB - Free Report) and Associated Banc-Corp (ASB - Free Report) announced an increase in their quarterly dividend payouts.

Prosperity Bancshares announced that its Board of Directors approved a quarterly dividend of 55 cents per share, representing a hike of 5.8% from the prior payout. The dividend will be paid out on Jan 3, 2023, to shareholders of record as on Dec 15, 2022.  

Similarly, Associated Banc-Corp declared a regular quarterly cash dividend of 21 cents per share, marking a 5% increase from the prior payout. The dividend will be paid out on Dec 15 to shareholders of record as on Dec 1.


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