Truist and KeyCorp Dividends Are Covered, but Growth Has Stalled

Truist and KeyCorp both pay dividends that look affordable against current earnings, but neither bank increased its annual payout from 2023 through 2025. That turns the comparison away from headline yield and toward the durability of earnings, credit quality and the likelihood of the next raise.

Truist has the steadier record

Truist paid $2.08 per share in each of those three years. The source analysis calculated that the dividend used 52% of normalized 2025 earnings and about 44% of the 2026 consensus estimate. Its payout ratio did not exceed 58% over the past decade.

Second-quarter 2026 earnings benefited from stronger profitability as Truist moved away from marine, recreational-vehicle and much of its auto lending. Management has accepted slower balance-sheet growth in exchange for a higher-quality commercial mix.

That strategy also limits near-term net-interest-income growth. Deposit customers continue to demand higher rates, and Truist reduced its 2026 net-interest-income growth outlook. The dividend comes before buybacks in management's stated capital priorities, which adds support but does not guarantee an increase.

KeyCorp has more momentum and more history to repair

KeyCorp declared a $0.205 quarterly common dividend for the second and third quarters of 2026, keeping the annualized rate at $0.82. Its second-quarter net income from continuing operations attributable to common shareholders was $472 million, or $0.44 per diluted share, up 26% year over year.

The source analysis put KeyCorp's 2025 normalized payout ratio at 55% and its 2026 consensus ratio near 45%. That is close to Truist today, but KeyCorp's ratio reached 93% in 2023 when earnings weakened. The earlier stress explains why a similar current ratio does not carry the same history.

KeyCorp raised its 2026 revenue-growth outlook to 7% to 8% and net-interest-income growth to 9% to 11%. Faster growth could fund a future dividend increase, but net charge-offs of 42 basis points in the second quarter show that credit costs deserve attention.

Income now versus optionality

Truist offered the slightly higher yield in the source comparison and has maintained a more stable payout cushion. KeyCorp's faster revenue growth gives it more upside if credit remains controlled.

For dividend investors, Truist is the more defensive choice today. KeyCorp becomes more compelling if it converts revenue growth into sustained per-share earnings and then resumes dividend growth. The next dividend declarations and third-quarter credit metrics will be more informative than another small change in market yield.