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KeyCorp's Dividend Analysis

Assessing the Sustainability of KeyCorp's Upcoming Dividend Payment

KeyCorp (NYSE:KEY) recently announced a dividend of $0.21 per share, payable on 2024-03-15, with the ex-dividend date set for 2024-02-26. As investors look forward to this upcoming payment, the spotlight also shines on the company's dividend history, yield, and growth rates. Using the data from GuruFocus, let's look into KeyCorp's dividend performance and assess its sustainability.

What Does KeyCorp Do?


With assets of over $170 billion, Ohio-based KeyCorp's bank footprint spans 16 states, but it is predominantly concentrated in its two largest markets: Ohio and New York. KeyCorp is primarily focused on serving middle-market commercial clients through a hybrid community/corporate bank model.

KeyCorp's Dividend Analysis
KeyCorp's Dividend Analysis

A Glimpse at KeyCorp's Dividend History

KeyCorp has maintained a consistent dividend payment record since 1985, with dividends currently distributed on a quarterly basis. The company has increased its dividend each year since 2010, earning it the title of a dividend achiever, a distinction awarded to companies with at least 14 consecutive years of dividend increases.

Below is a chart showing annual Dividends Per Share for KeyCorp to track historical trends.

Breaking Down KeyCorp's Dividend Yield and Growth

As of today, KeyCorp currently has a 12-month trailing dividend yield of 5.75% and a 12-month forward dividend yield of 5.75%, indicating an expectation of consistent dividend payments over the next 12 months.

Over the past three years, KeyCorp's annual dividend growth rate was 3.50%. This rate increased to 6.50% per year over a five-year horizon, and over the past decade, KeyCorp's annual dividends per share growth rate stands at an impressive 16.10%.

Based on KeyCorp's dividend yield and five-year growth rate, the 5-year yield on cost of KeyCorp stock as of today is approximately 7.88%.

KeyCorp's Dividend Analysis
KeyCorp's Dividend Analysis

The Sustainability Question: Payout Ratio and Profitability

To assess the sustainability of the dividend, one needs to evaluate the company's payout ratio. The dividend payout ratio provides insights into the portion of earnings the company distributes as dividends. As of 2023-12-31, KeyCorp's dividend payout ratio is 0.92, which may suggest that the company's dividend may not be sustainable.

KeyCorp's profitability rank, at 5 out of 10 as of 2023-12-31, suggests fair profitability. The company has reported positive net income each year over the past decade, reinforcing its profitability.

Growth Metrics: The Future Outlook

KeyCorp's growth rank of 5 out of 10 indicates a fair growth outlook. The company's 3-year EPS growth rate demonstrates its ability to grow earnings, which is vital for maintaining dividends. Over the past three years, KeyCorp's earnings have increased by approximately 0.20% per year on average, outperforming about 22.04% of global competitors.

Next Steps

In conclusion, KeyCorp's upcoming dividend payment is backed by a solid history of consistent and growing dividends. However, the high payout ratio may raise concerns about the long-term sustainability of these payments. Despite this, KeyCorp's fair profitability and growth metrics provide a balanced view of its financial health. Investors should weigh these factors when considering KeyCorp's dividend prospects. For those seeking high-dividend yield stocks, GuruFocus Premium offers a High Dividend Yield Screener to discover similar investment opportunities.

This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.

This article first appeared on GuruFocus.