8. KeyCorp (NYSE:KEY)
Number of Hedge Fund Holders: 43
A caller mentioned that they plan to buy KeyCorp (NYSE:KEY) for the dividend and asked if it was time to add some shares since the stock pulled back. Here’s what Cramer said in response:
“Okay, so Jeff Marks and I were kicking things around. I said, we gotta own more banks… and I said, how about Key for the Charitable Trust because of that dividend? You’re onto something. I like your thinking. We had Chris Gorman on. Seems like a terrific guy.”
KeyCorp (NYSE:KEY) is a holding company for the KeyBank National Association, offering a broad range of retail and commercial banking products and services, including loans, investments, wealth management, capital market services, and financial advisory to both individual and institutional clients. In October 2024, Cramer explained what was going on with the company and Scotiabank as he said:
“KeyCorp made some mistakes with its bond portfolio that severely damaged its earnings power when bond yields soared and bond prices got clobbered. Now, if the Fed is our friend, that won’t be a problem anymore… Plus, a couple of months ago, we learned that the Bank of Nova Scotia, also known as Scotiabank, will be paying $2.8 billion to take a nearly 15% stake in KeyCorp. Oh, man. It’s a complex transaction, which will take place in three tranches.
… But what matters is Scotiabank’s investment gives KeyCorp a much better capital cushion that it can use to reposition its investment portfolio. I think this is a nice reset opportunity for KeyCorp. And I’d be buying it right along the side of the Canadians, especially since the stock currently yields nearly 5%. In fact, with KeyCorp trading at $16 and change, you know, you’re actually getting a slightly better price than the $17.17 per share Scotiabank’s paying for its stake. That sounds good to me.”
