Definitive Analysis
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KeyCorp (KEY)

Company Dividend Discount ModelIndustry: Banks - RegionalSector: Financial Services

Valuation Snapshot

Stable Growth$11.21 - $18.23$14.36
Multi-Stage$14.86 - $16.21$15.53
Blended Fair Value$14.94
Current Price$18.69
Upside-20.05%
DecisionDon't Buy

Dividend History & Growth Metrics (10Y)

Metric5Y CAGR10Y CAGR2024202320222021202020192018201720162015
DPS2.89%14.47%0.860.850.800.770.770.750.610.450.310.25
YoY Growth--1.76%6.67%3.77%-0.72%3.11%22.56%36.67%43.28%25.47%11.25%
Dividend Yield--5.40%5.48%6.35%3.43%3.87%7.22%3.74%2.29%1.76%2.25%

Stable Growth Model (Adjusted)

(USD in Millions except Per Share Data)
Net Income To Common (M)1,075.00
(-) Cash Dividends Paid (M)1,030.00
(=) Cash Retained (M)45.00
MetricLOWBASEHIGH
Required Retention Ratio20.0%12.5%7.5%
(=) Cash Required (M)215.00134.3880.63
Cash Retained (M)45.0045.0045.00
(-) Cash Required (M)-215.00-134.38-80.63
(=) Excess Retained (M)-170.00-89.38-35.63
(/) Shares Outstanding (M)1,073.461,073.461,073.46
(=) Excess Retained per Share-0.16-0.08-0.03
LTM Dividend per Share0.960.960.96
(+) Excess Retained per Share-0.16-0.08-0.03
(=) Adjusted Dividend0.800.880.93
WACC / Discount Rate9.10%9.10%9.10%
Growth Rate1.82%2.82%3.82%
Fair Value$11.21$14.36$18.23
Upside / Downside-40.00%-23.17%-2.44%

Multi-Stage Model: Projections

(USD in Millions)
MetricTTMDec-27Dec-28Dec-29Dec-30Dec-31Terminal
Net Income (M)1,075.001,105.351,136.561,168.661,201.651,235.581,272.65
Payout Ratio95.81%94.65%93.49%92.33%91.16%90.00%92.50%
Projected Dividends (M)1,030.001,046.231,062.561,078.971,095.461,112.021,177.20

Multi-Stage Valuation

MetricLOWBASEHIGH
WACC / Discount Rate9.10%9.10%9.10%
Growth Rate1.82%2.82%3.82%
Year 1 PV (M)949.66958.98968.31
Year 2 PV (M)875.45892.73910.17
Year 3 PV (M)806.91830.92855.40
Year 4 PV (M)743.62773.27803.79
Year 5 PV (M)685.19719.50755.17
PV of Terminal Value (M)11,894.8212,490.4913,109.80
Equity Value (M)15,955.6416,665.8817,402.64
Shares Outstanding (M)1,073.461,073.461,073.46
Fair Value$14.86$15.53$16.21
Upside / Downside-20.47%-16.93%-13.26%

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