Stock of the Day

December 23, 2020

Fifth Third Bancorp (FITB)

$42.88
-$0.73 (-1.7%)
Market Cap: $29.24B

About Fifth Third Bancorp

Fifth Third Bancorp operates as the bank holding company for Fifth Third Bank, National Association that engages in the provision of a range of financial products and services in the United States. It operates through three segments: Commercial Banking, Consumer and Small Business Banking, and Wealth and Asset Management. The Commercial Banking segment offers credit intermediation, cash management, and financial services; lending and depository products; and cash management, foreign exchange and international trade finance, derivatives and capital markets services, asset-based lending, real estate finance, public finance, commercial leasing, and syndicated finance for business, government, and professional customers. The Consumer and Small Banking segment provides a range of deposit and loan products to individuals and small businesses; home equity loans and lines of credit; credit cards; and cash management services. This segment also engages in the residential mortgage that include origination, retention and servicing of residential mortgage loans, sales and securitizations of loans, and hedging activities; indirect lending, including extending loans to consumers through automobile dealers, motorcycle dealers, powersport dealers, recreational vehicle dealers, and marine dealers; and home improvement and solar energy installation loans through contractors and installers. The Wealth & Asset Management segment provides various wealth management services for individuals, companies, and not-for-profit organizations. It offers retail brokerage services to individual clients; and broker dealer services to the institutional marketplace. This segment also provides wealth planning, investment management, banking, insurance, and trust and estate services; and advisory services for institutional clients comprising middle market businesses, non-profits, states, and municipalities. The company was founded in 1858 and is headquartered in Cincinnati, Ohio.

Fifth Third Bancorp Bull Case

Here are some ways that investors could benefit from investing in Fifth Third Bancorp:

  • The current stock price is $43.51, which is relatively stable and shows potential for growth given the company's market cap of $29.18 billion.
  • Fifth Third Bancorp has a strong dividend yield of 3.40%, with a recent quarterly dividend of $0.37, indicating a commitment to returning value to shareholders.
  • Recent upgrades from analysts, such as Wells Fargo & Company raising their price objective to $54.00, suggest positive market sentiment and potential for stock appreciation.
  • Institutional ownership is high at 83.79%, which often indicates confidence in the company's performance and stability among large investors.
  • The company has shown resilience with a PE ratio of 13.86, which is considered reasonable and suggests that the stock may be undervalued compared to its earnings potential.

Fifth Third Bancorp Bear Case

Investors should be bearish about investing in Fifth Third Bancorp for these reasons:

  • Despite recent upgrades, one analyst has issued a sell rating, indicating that there are differing opinions on the stock's future performance.
  • The stock has experienced fluctuations, with a 12-month low of $33.03, which may raise concerns about its volatility and risk for investors.
  • Analysts have mixed ratings, with nine holding a "hold" rating, suggesting that many believe the stock may not outperform the market in the near term.
  • The company's debt-to-equity ratio is 0.82, which, while manageable, indicates that the company is somewhat leveraged, potentially increasing financial risk.
  • Recent trading activity shows a decline of 1.9%, which may signal short-term weakness and could deter potential investors looking for immediate gains.

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