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Fifth Third Raises Q2 Dividend by 8.3%

Zacks Equity Research

Fifth Third Bancorp (FITB) has announced a cash dividend of 13 cents per common share for second-quarter 2014. This marks an 8.3% hike from 12 cents per common share that the company last paid to its shareholders. The new dividend is payable on Jul 17, to shareholders of record as of Jun 30.

Fifth Third reported first-quarter earnings of 36 cents per share, which missed the Zacks Consensus Estimate by 12.2%. However, the Cincinnati, OH-based major regional bank did not lag in capital deployment activities and repurchased 8 million common shares.

It also cleared the stress test in the reported period and subsequently got its capital plan approved by the Federal Reserve, under the 2014 Comprehensive Capital Analysis and Review. The capital plan included a raise in the company’s quarterly common stock dividend to 13 cents per share.

Close on the heels of the approval of its capital plan, Fifth Third entered into a deal to partially sell its stake in Vantiv Inc. (VNTV). This divestiture is expected to generate a pre-tax gain of nearly $125 million in second-quarter 2014. The company is expected to utilize the proceeds to further repurchase its common shares.

The latest hike in dividend is in sync with its capital plan and stable capital position.

Currently, Fifth Third carries a Zacks Rank #3 (Hold). Some better-ranked finance stocks include CVB Financial Corp. (CVBF) and Western Alliance Bancorporation (WAL). Both these stocks carry a Zacks Rank #1 (Strong Buy).

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