Fifth Third Bancorp's Dividend Analysis
An In-Depth Look at Fifth Third Bancorp's Upcoming Dividend and Financial Health
Fifth Third Bancorp (NASDAQ:FITB) recently announced a dividend of $0.35 per share, payable on 2024-01-16, with the ex-dividend date set for 2023-12-28. As investors look forward to this upcoming payment, the spotlight also shines on the company's dividend history, yield, and growth rates. Using the data from GuruFocus, let's delve into Fifth Third Bancorp's dividend performance and evaluate its long-term sustainability.
What Does Fifth Third Bancorp Do?
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Fifth Third Bancorp is a diversified financial-services company headquartered in Cincinnati. The company manages assets worth over $200 billion and operates an extensive network of full-service banking centers and ATMs across multiple states, including Ohio, Kentucky, Indiana, Michigan, Illinois, Florida, Tennessee, West Virginia, Georgia, and North Carolina.
A Glimpse at Fifth Third Bancorp's Dividend History
Fifth Third Bancorp has upheld a consistent dividend payment track record since 1984, distributing dividends quarterly. The company has also demonstrated its commitment to increasing shareholder value by raising its dividend annually since 2009, earning it the status of a dividend achievera designation reserved for companies with at least 14 consecutive years of dividend increases.
Below is a chart showing annual Dividends Per Share to track historical trends.
Breaking Down Fifth Third Bancorp's Dividend Yield and Growth
Fifth Third Bancorp currently boasts a 12-month trailing dividend yield of 3.85% and a forward dividend yield of 3.91%, hinting at a potential increase in dividend payments over the next year. Over the past three years, Fifth Third Bancorp's dividend has grown at an annual rate of 10.30%, which jumps to 15.80% when looking at a five-year span. The decade-long annual growth rate stands at an impressive 13.10%.
Considering Fifth Third Bancorp's dividend yield and five-year growth rate, the 5-year yield on cost for Fifth Third Bancorp stock is approximately 8.02%.
The Sustainability Question: Payout Ratio and Profitability
The sustainability of Fifth Third Bancorp's dividend is often gauged by its payout ratio. The dividend payout ratio shows the portion of earnings allocated to dividends, with a lower ratio indicating more earnings retained for growth and cushioning against downturns. Fifth Third Bancorp's dividend payout ratio stands at 0.38 as of 2023-09-30.
The company's profitability rank is 6 out of 10, reflecting fair profitability. Consistent positive net income over the past decade reinforces its financial strength.
Growth Metrics: The Future Outlook
Fifth Third Bancorp's growth rank of 6 indicates a solid growth outlook. The company's revenue per share and 3-year revenue growth rate reveal a robust revenue model, despite underperforming approximately 56.19% of global competitors. Similarly, the 3-year EPS growth rate and 5-year EBITDA growth rate indicate growth potential, albeit lower than some global competitors.
Next Steps
In conclusion, Fifth Third Bancorp's upcoming dividend, impressive dividend growth rate, reasonable payout ratio, and fair profitability and growth metrics paint a picture of a stable financial institution with a commitment to shareholder returns. While the company's growth rates in revenue and earnings may not lead the industry, they suggest a dependable foundation for continued dividend payments. Investors considering high-dividend yield stocks can explore further with GuruFocus's High Dividend Yield Screener.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
This article first appeared on GuruFocus.
