12 Best Dividend Stocks Under $25

2. KeyCorp (NYSE:KEY)

Number of Hedge Fund Holders: 46

Share Price as of June 21: $13.5

KeyCorp (NYSE:KEY) is an American retail banking company that offers a wide range of retail and commercial banking services to its consumers. In the first quarter of 2024, the company’s net interest income (NII) fell by over 20% compared to the last year and 4.5% from the previous quarter. This decline is due to the company’s past decisions regarding balance sheet management. While management expects NII to be lower for the entire year, they believe the second half to be much stronger than the first. This improvement will mainly come from the increased benefits of short-duration swaps and maturing Treasuries that can be repriced.

That said, overall fees grew by 6% from the previous quarter and YoY, mainly driven by KeyCorp (NYSE:KEY)’s record-breaking first-quarter investment banking fees. Analysts expect investment banking revenue to reach $600 million to $650 million for the year, with $170 million coming from this quarter alone. The company continues to excel in targeting its investments and growth opportunities and is on track to maintain stable expenses for the third consecutive year by the end of 2024.

Diamond Hill Capital also presented a positive stance on KeyCorp (NYSE:KEY)’s growth in the coming quarters in its Q1 2024 investor letter. Here is what the firm has to say:

“Portfolio activity has remained modest as valuations have risen, and it is increasingly challenging to find high-quality companies trading at interesting valuations. However, we did identify two new investments in Q1: Sysco Corporation and KeyCorp (NYSE:KEY).

Retail and commercial bank KeyCorp is a high-quality financial institution that we believe is trading at a discounted valuation. Over the next several years, we expect KeyCorp will generate improved returns and tangible book value growth as net interest margins expand and Treasurys on its balance sheet mature. We also anticipate positive loan growth following a period of balance sheet optimization and improvements among its unrealized losses as the company’s securities portfolio increases in value.”

KeyCorp (NYSE:KEY), one of the best dividend stocks on our list, has been paying regular dividends to shareholders since 1985. The company currently pays a quarterly dividend of $0.205 per share and supports a dividend yield of 5.89%, as of June 21.

At the end of Q1 2024, 46 hedge funds in Insider Monkey’s database owned stakes in KeyCorp (NYSE:KEY), down from 49 in the previous quarter. These stakes have a total value of more than $745 million.