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Should You Buy KeyCorp (NYSE:KEY) For Its Dividend?

A sizeable part of portfolio returns can be produced by dividend stocks due to their contribution to compounding returns in the long run. KeyCorp (NYSE:KEY) has returned to shareholders over the past 10 years, an average dividend yield of 2.00% annually. Does KeyCorp tick all the boxes of a great dividend stock? Below, I’ll take you through my analysis. View out our latest analysis for KeyCorp

5 checks you should do on a dividend stock

When researching a dividend stock, I always follow the following screening criteria:

  • Is their annual yield among the top 25% of dividend payers?

  • Has its dividend been stable over the past (i.e. no missed payments or significant payout cuts)?

  • Has the amount of dividend per share grown over the past?

  • Does earnings amply cover its dividend payments?

  • Will it be able to continue to payout at the current rate in the future?

NYSE:KEY Historical Dividend Yield June 22nd 18
NYSE:KEY Historical Dividend Yield June 22nd 18

How does KeyCorp fare?

KeyCorp has a trailing twelve-month payout ratio of 32.27%, which means that the dividend is covered by earnings. Going forward, analysts expect KEY’s payout to increase to 35.80% of its earnings, which leads to a dividend yield of 2.96%. In addition to this, EPS should increase to $1.75. The higher payout forecasted, along with higher earnings, should lead to greater dividend income for investors moving forward.

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If dividend is a key criteria in your investment consideration, then you need to make sure the dividend stock you’re eyeing out is reliable in its payments. Not only have dividend payouts from KeyCorp fallen over the past 10 years, it has also been highly volatile during this time, with drops of over 25% in some years. This means that dividend hunters should probably steer clear of the stock, at least for now until the track record improves.

Compared to its peers, KeyCorp produces a yield of 2.33%, which is on the low-side for Banks stocks.

Next Steps:

If you are building an income portfolio, then KeyCorp is a complicated choice since it has some positive aspects as well as negative ones. But if you are not exclusively a dividend investor, the stock could still be an interesting investment opportunity. Given that this is purely a dividend analysis, you should always research extensively before deciding whether or not a stock is an appropriate investment for you. I always recommend analysing the company’s fundamentals and underlying business before making an investment decision. Below, I’ve compiled three fundamental aspects you should further research:

  1. Future Outlook: What are well-informed industry analysts predicting for KEY’s future growth? Take a look at our free research report of analyst consensus for KEY’s outlook.

  2. Valuation: What is KEY worth today? Even if the stock is a cash cow, it’s not worth an infinite price. The intrinsic value infographic in our free research report helps visualize whether KEY is currently mispriced by the market.

  3. Dividend Rockstars: Are there better dividend payers with stronger fundamentals out there? Check out our free list of these great stocks here.


To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.

The author is an independent contributor and at the time of publication had no position in the stocks mentioned.