KeyCorp

(New York Stock Exchange)
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Slightly Bullish +15

Better Dividend Stock: Truist vs. KeyCorp

Dividend AI-generated analysis

πŸ“Š Truist offers a higher dividend yield of 4.6% compared to KeyCorp's 4.3%, providing $460 annually on a $10,000 investment versus $430 for KeyCorp.

πŸ›‘οΈ Truist maintains a safer payout ratio with a decade-long peak of 58%, while KeyCorp's coverage tightened significantly to 93% in fiscal 2023.

πŸ“ˆ KeyCorp reported strong second-quarter revenue growth of 7% and raised its 2026 guidance for revenue between 7% and 8%.

⚠️ KeyCorp faces elevated credit risk with net charge-offs rising to 42 basis points in the second quarter from 39 a year prior.

πŸ”„ Truist has shifted capital away from marine, RV, and auto lending into higher-quality commercial loans to drive stronger profitability.

πŸ’° Management at KeyCorp prioritizes dividends and client investment over buybacks, with $1.3 billion in repurchases planned for 2026.

πŸ“‰ Truist grew diluted earnings by 37% in the second quarter of 2026 but maintained its dividend at $2.08 per share.

πŸ“ˆ KeyCorp grew second-quarter earnings by 26% and expects net interest income to grow between 9% and 11% in 2026.

Bullish Signals
  • KeyCorp raised its fiscal 2026 guidance to expect revenue growth of 7% to 8% and net interest income growth of 9% to 11%.
  • KeyCorp's second-quarter 2026 revenue increased by 7% year-over-year to reach $1.96 billion, demonstrating business momentum.
  • KeyCorp plans to execute at least $1.3 billion in share buybacks for fiscal 2026 alongside its dividend payments.
Risk Factors
  • KeyCorp's dividend payout ratio hit a risky 93% in fiscal 2023, indicating tighter earnings coverage compared to peers.
  • Net charge-offs at KeyCorp rose to 42 basis points in the second quarter of 2026, up from 39 basis points the prior year.
  • KeyCorp has not increased its dividend since fiscal 2023 despite significant earnings growth in recent quarters.
Full Analysis
This article compares Truist Financial and KeyCorp as dividend investment options, concluding that Truist is the superior choice based on higher yield and more sustainable earnings coverage. At the time of writing, Truist offered a 4.6% yield compared to KeyCorp's 4.3%, with both banks maintaining their fiscal 2025 dividend levels despite recent earnings growth. Truist demonstrates stronger financial resilience with a payout ratio that peaked at 58% over the last decade, whereas KeyCorp's ratio reached a risky 93% in fiscal 2023. Truist has strategically pruned lower-quality loan segments like marine and RV lending to focus on higher-yield commercial loans, driving improved profitability and financial performance. KeyCorp is showing signs of business momentum with second-quarter revenue rising 7% year-over-year and raised guidance for 2026 revenue growth between 7% and 8%. However, the bank faces credit risks as net charge-offs increased to 42 basis points in the second quarter, and management explicitly prioritizes client investment and dividends over share repurchases.