Fifth Third Bancorp
Fifth Third Bancorp
(FITB - Get Report)
of Cincinnati closed at $16.31 Thursday, returning 8% during the first quarter, following a 23% return during 2012. The shares trade for 1.4 times tangible book value and for 9.7 times the consensus 2014 EPS estimate of $1.69. The consensus 2013 EPS estimate is $1.65.
Fifth Third on March 14 announced a "potential increase" in its quarterly dividend from 10 cents a share, with approval for the potential repurchase of up to $750 million in trust preferred securities. The company also received approval for the potential conversion of $398 million in convertible preferred shares to common shares. If the conversions are completed, the company has Federal Reserve approval for common share buybacks totaling up to $984 million.
Based on the current quarterly payout, the shares have a dividend yield of 2.45%.
Jefferies analyst Ken Usdin said in a report on March 15 that "we see FITB's announced capital plan as a modest positive. Potential upside to EPS is 3% at best and neutral at worst."
The company will report its first-quarter results on April 18, with the consensus estimate being a 39-cent profit, declining from 43 cents in the fourth quarter, and 45 cents in the first quarter of 2012.
O'Connor rates Fifth Third a "buy," and estimates the company will report a first-quarter profit of 40 cents, factoring in two cents from valuation adjustments in warrants the company holds to purchase shares of
, as well as gains from a securitization of auto loans.
O'Connor expects Fifth Third's net interest margin "to decline modestly (possibly 4-5bps per quarter) through 2013."
For the first quarter, the analyst expects mortgage repurchase costs to decline by $29 million from an "elevated" fourth quarter.
Interested in more on Fifth Third Bancorp? See TheStreet Ratings' report card for this stock.
Written by Philip van Doorn in Jupiter, Fla.
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Philip van Doorn