Fifth Third Bancorp (FITB - Free Report) raised its quarterly common stock dividend by about 14.3% to 16 cents per share. The dividend will be paid on Oct 16 to shareholders of record as of Sep 29, 2017.
Fifth Third’s robust business model reflects the company’s commitment toward returning value to shareholders with its strong cash generation capabilities. Prior to this revision, the company had raised its quarterly dividend to 14 cents per share in December 2016, an 8% hike.
In 2017, Fifth Third submitted a capital plan to the Federal Reserve Board, seeking approval for dividend hike and common stock repurchases. The action followed the Fed’s approval of dividend hike and stock buyback after the completion of stress tests to assess banks’ financial position.
Considering last day’s closing price of $27.18 per share, the dividend yield is currently valued at 2.35%. Additionally, the company has a share repurchase program in place. Notably, Fifth Third received approval of share buyback up to $1.16 billion.
Investors interested in this Zacks Rank #3 (Hold) stock can have a look at this banking giant’s fundamentals and growth prospects.
Earnings Per Share Strength: Fifth Third witnessed earnings growth of 2.41% in the last three-five years. Also, the company’s long-term (three- five years) estimated EPS growth rate of 5.83% promises rewards for investors over the long run. Good news is that the company pulled off an average positive earnings surprise of 19.92% over the trailing four quarters.
Stock is Undervalued: Fifth Third has a P/E ratio of 14.58 compared to the S&P 500 average of 19.11. Further, the company has a P/B ratio of 1.32 compared to the S&P 500 average of 3.14. Based on these ratios, the stock seems undervalued.
Superior Return on Equity (ROE): Fifth Third’s ROE of 10.4%, as compared with the industry average of 9.9%, highlights the company’s commendable position over its peers.
Share Price Movement: Fifth Third’s shares gained 9.1% over the last six months compared with 5.7% growth recorded by the industry.
Stocks to Consider
BancFirst Corporation (BANF - Free Report) has been witnessing upward estimate revisions for the last 60 days. Additionally, the stock jumped more than 18.6% over the past six months. It currently flaunts a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
State Street Corporation (STT - Free Report) has been witnessing upward estimate revisions for the last 60 days. Also, the company’s shares have risen nearly 25.4% over the last six months. It holds a Zacks Rank #2, at present.
The PNC Financial Services Group, Inc. (PNC - Free Report) has been witnessing upward estimate revisions for the last 60 days. Over the last six months, the company’s share price has been up more than 10%. It carries a Zacks Rank #2.
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