Fifth Third Bancorp's Dividend Analysis
Insights into Fifth Third Bancorp's Upcoming Dividend Payment and Historical Performance
Fifth Third Bancorp (NASDAQ:FITB) recently announced a dividend of $0.35 per share, payable on 2024-04-15, with the ex-dividend date set for 2024-03-27. 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 look into Fifth Third Bancorp's dividend performance and assess its 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 has over $200 billion in assets and operates numerous full-service banking branches and ATMs throughout 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 maintained a consistent dividend payment record since 1984, distributing dividends quarterly. The company has increased its dividend each year since 2009, earning it the status of a dividend achiever, a title reserved for companies with at least 15 consecutive years of dividend increases. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Fifth Third Bancorp's Dividend Yield and Growth
Fifth Third Bancorp currently has a 12-month trailing dividend yield of 3.76% and a forward dividend yield of 3.80%, indicating anticipated dividend increases over the next year. Over the past three years, Fifth Third Bancorp's annual dividend growth rate was 8.00%. This rate climbed to 12.00% per year over a five-year span, and over the past decade, the annual dividends per share growth rate has been an impressive 12.70%. As of today, the 5-year yield on cost for Fifth Third Bancorp stock is approximately 6.63%.
The Sustainability Question: Payout Ratio and Profitability
To assess the sustainability of the dividend, one needs to evaluate the company's payout ratio. As of 2023-12-31, Fifth Third Bancorp's dividend payout ratio is 0.39, suggesting a healthy balance between distributing earnings as dividends and retaining funds for future growth and downturns. Fifth Third Bancorp's profitability rank is 5 out of 10, indicating fair profitability, and the company has reported positive net income each year for the past decade, reinforcing its financial stability.
Growth Metrics: The Future Outlook
Fifth Third Bancorp's growth rank of 5 out of 10 suggests a fair growth outlook. Its revenue per share and 3-year revenue growth rate, at an average of 6.50% per year, underperform approximately 50.29% of global competitors. The company's 3-year EPS growth rate, at 23.10% per year on average, underperforms approximately 29.44% of global competitors. Additionally, Fifth Third Bancorp's 5-year EBITDA growth rate of 9.40% underperforms approximately 41.99% of global competitors.
Concluding Thoughts on Fifth Third Bancorp's Dividend Prospects
In conclusion, Fifth Third Bancorp's history of consistent dividend payments, coupled with its dividend growth rate, suggests a commitment to returning value to shareholders. The company's moderate payout ratio and profitability point to a sustainable dividend. However, when considering growth metrics, investors should weigh the underperformance compared to global competitors. As value investors, it's essential to consider whether Fifth Third Bancorp's dividend prospects align with long-term investment goals. Will Fifth Third Bancorp continue its trajectory of dividend growth, and how will it balance this with the need for reinvestment in an ever-evolving financial landscape?
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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.
