1. Fifth Third Bancorp
Shares of Fifth Third Bancorp (FITB) of Cincinnati closed at $16.39 Tuesday, returning 9% this year, 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 $1.64.
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 2.44%.The company will announce its first-quarter results on April 18, with the consensus estimate being a profit of 38 cents, declining from 43 cents in the fourth quarter and 45 cents in the first quarter of 2012. Scinicariello's price target for Fifth Third's shares is $19, and on Tuesday the analyst lowered his first-quarter EPS estimate to 40 cents from 42 cents, while lowering his full-year 2013 EPS estimate to $1.71 from $1.78, and his 2014 EPS estimate to $1.79 from $1.87, "due to mortgage banking trends." On a brighter note, Fifth Third's complicated 2013 capital plan could result in common-share buybacks totaling up to $1.084 billion, Scinicariello wrote, adding that "the potential replacement of $750MM of trust preferreds could bolster the NIM." Interested in more on Fifth Third Bancorp? See TheStreet Ratings' report card for this stock. -- Written by Philip van Doorn in Jupiter, Fla. >Contact by Email. Follow @PhilipvanDoorn
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