Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.
NEW YORK (
) has been reiterated by TheStreet Ratings as a buy with a ratings score of A-. The company's strengths can be seen in multiple areas, such as its revenue growth, solid stock price performance, expanding profit margins, notable return on equity and growth in earnings per share. We feel these strengths outweigh the fact that the company has had sub par growth in net income.
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Highlights from the ratings report include:
- FITB's revenue growth has slightly outpaced the industry average of 1.6%. Since the same quarter one year prior, revenues slightly increased by 2.6%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- The stock has risen over the past year as investors have generally rewarded the company for its earnings growth and other positive factors like the ones we have cited in this report. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
- The gross profit margin for FIFTH THIRD BANCORP is currently very high, coming in at 90.30%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 24.28% significantly outperformed against the industry average.
- The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Commercial Banks industry and the overall market on the basis of return on equity, FIFTH THIRD BANCORP has outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.
- FIFTH THIRD BANCORP's earnings per share improvement from the most recent quarter was slightly positive. The company has demonstrated a pattern of positive earnings per share growth over the past two years. However, we anticipate underperformance relative to this pattern in the coming year. During the past fiscal year, FIFTH THIRD BANCORP increased its bottom line by earning $1.66 versus $1.18 in the prior year. For the next year, the market is expecting a contraction of 0.6% in earnings ($1.65 versus $1.66).
Fifth Third Bancorp operates as a diversified financial services company in the United States. The company operates through four segments: Commercial Banking, Branch Banking, Consumer Lending, and Investment Advisors. Fifth Third has a market cap of $14.3 billion and is part of the financial sector and banking industry. The company has a P/E ratio of 10.00, below the S&P 500 P/E ratio of 18.00. Shares are up 7.9% year to date as of the close of trading on Monday.
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--Written by a member of TheStreet Ratings Staff.
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