3 High-Yielding S&P 500 Bank Stocks to Watch Amid Favorable Banking Sector Outlook

KeyCorp, Bank of Hawaii, and Comerica are highlighted as S&P 500 banks with higher than 4% dividend yields. Lower interest rates and economic growth support loan demand and credit quality, making these banks attractive opportunities. All three stocks have risen over 10% in the past year and have solid fundamentals, including a Zacks Rank of 2 or 3.

In the current economic environment, characterized by lower interest rates and steady economic growth, several S&P 500 banks are emerging as attractive investment opportunities. KeyCorp (KEY), Bank of Hawaii (BOH), and Comerica (CMA) stand out due to their solid dividend yields, which are all above 4%. These banks are well-positioned to benefit from the favorable economic conditions and are expected to continue rewarding shareholders.

KeyCorp (KEY)
Headquartered in Cleveland, OH, KeyCorp is a leading regional bank in the United States. It offers a wide range of banking services, including commercial and retail banking, commercial leasing, investment management, consumer finance, and investment banking. KeyCorp's strong balance sheet, robust loan demand, and solid dividend yield of 4.4% make it an appealing choice for investors. The company has increased its dividends twice in the last five years, with a payout ratio of 60%. 3 S&P 500 Bank Stocks With More Than 4% Dividend Yield to Watch^[1]

Bank of Hawaii (BOH)
Bank of Hawaii is a bank holding company based in Honolulu, Hawaii, providing a broad array of products and services in Hawaii, Guam, and other Pacific Islands. The company's revenue growth is fueled by rising net interest income (NII) and fee income. With a dividend yield of 4.2%, Bank of Hawaii is another attractive option for income-focused investors. The company has increased its dividends once in the last five years, with a payout ratio of 73%. 3 S&P 500 Bank Stocks With More Than 4% Dividend Yield to Watch^[1]

Comerica (CMA)
Comerica, based in Dallas, TX, is a banking and financial services company operating in Texas, California, Michigan, Arizona, and Florida. The company's solid organic growth, robust loan pipeline, and focus on operational efficiency make it a strong contender in the banking sector. Comerica's dividend yield stands at 4.1%, and it has raised its quarterly dividend once in the last five years, with a payout ratio of 54%. Comerica Rises 21.8% in 3 Months: How to Approach the Stock Now?^[2]

Factors Driving Performance
The Federal Reserve's recent interest rate cuts have positively impacted these banks by lowering borrowing costs, stimulating loan demand, and boosting net interest income. Additionally, steady economic growth supports credit quality and profitability, further enhancing these banks' prospects. All three companies have shown strong price performance, with each stock rising more than 10% in the past year.

Conclusion
Dividend-paying bank stocks like KeyCorp, Bank of Hawaii, and Comerica offer investors a combination of attractive income and potential growth. With yields above 4%, solid balance sheets, and strategic initiatives to strengthen revenue streams, these banks are well-positioned to reward shareholders. However, investors should remain selective and monitor fundamentals, payout ratios, and market conditions to build a resilient, income-generating portfolio.

References
3 S&P 500 Bank Stocks With More Than 4% Dividend Yield to Watch^[1] https://finance.yahoo.com/news/3-p-500-bank-stocks-153800985.html
Comerica Rises 21.8% in 3 Months: How to Approach the Stock Now?^[2] https://www.tradingview.com/news/zacks:c8474a28b094b:0-comerica-rises-21-8-in-3-months-how-to-approach-the-stock-now/