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, growth in earnings per share and notable return on equity. 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 1.5%. 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.
- Investors have apparently begun to recognize positive factors similar to those we have mentioned in this report, including earnings growth. This has helped drive up the company's shares by a sharp 32.98% over the past year, a rise that has exceeded that of the S&P 500 Index. Regarding the stock's future course, although almost any stock can fall in a broad market decline, FITB should continue to move higher despite the fact that it has already enjoyed a very nice gain 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% is above that of the industry average.
- 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. We feel that this trend should continue. During the past fiscal year, FIFTH THIRD BANCORP increased its bottom line by earning $1.66 versus $1.18 in the prior year. This year, the market expects an improvement in earnings ($1.72 versus $1.66).
- 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 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 $15.7 billion and is part of the financial sector and banking industry. The company has a P/E ratio of 11.00, below the S&P 500 P/E ratio of 18.00. Shares are up 18.4% year to date as of the close of trading on Thursday.
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--Written by a member of TheStreet Ratings Staff.
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