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Published on 19 Nov 2021 on Zacks via Yahoo Finance

KeyCorp (KEY) Rewards Shareholders With 5.4% Dividend Hike


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KeyCorp KEY has announced a hike in the quarterly dividend. The bank announced a dividend of 19.5 cents per share, representing a hike of 5.4% from the prior payout. The dividend will be paid out on Dec 15 to shareholders on record as of Nov 30.Earlier in July, KeyCorp had announced plans to hike dividend, effective fourth-quarter 2021, subject to board of directors’ approval. It must be noted that last year amid the coronavirus-induced economic slowdown, the Federal Reserve had restricted capital distributions by major banks like KEY and JPMorgan JPM to conserve liquidity.Considering last day’s closing price of $23.67 per share, KeyCorp’s dividend yield currently stands at 3.30%. Not only is the yield attractive for income investors but it also represents a steady income stream. Further, the yield is impressive compared with the industry average of 2.47%.In addition to paying dividends, the company has an impressive share-repurchase plan in place. In July, KeyCorp had announced a new share buyback authorization of up to $1.5 billion through the third quarter of 2022. This replaced the remaining capacity under the previous authorization that was announced in January 2021. Further, in September, the bank entered into an accelerated share repurchase program under which it inked an agreement with a large investment bank to buy back up to $585 million worth of shares.Apart from these, KeyCorp has been undertaking business restructuring efforts to further enhance operating efficiency. In March, the company acquired data analytics-driven consultancy firm, AQN Strategies LLC. These, along with several other past buyouts, are expected to keep enhancing its profitability and market share, and help diversify revenues.Also, as demand for digital banking services continues to rise, KeyCorp has consolidated 73 branches since the beginning of 2021, with management continuing to look for opportunities to right-size its footprint.So far this year, shares of KeyCorp have jumped 44.2%, outperforming 37.7% rally recorded by the industry it belongs to.

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