Fifth Third Bancorp
Shares of Fifth Third Bancorp of Cincinnati have returned 6% this year, following a 23% return during 2012. The shares trade for 1.3 times their reported Dec. 31 tangible book value of $12.33, and for 9.5 times the consensus 2014 earnings estimate of $1.69 a share, among analysts polled by Thomson Reuters. The consensus 2013 EPS estimate is $1.65. Based on a quarterly payout of 10 cents, the shares have a dividend yield of 2.48%. During the fourth quarter, Fifth Third continued to grow its mortgage revenue, which totaled $258 million, increasing from $200 million the previous quarter and $156 million a year earlier, as the company continued to enjoy robust volume amid the refinancing boom. (Please see TheStreet's earnings coverage for a detailed discussion of the company's fourth-quarter results.) But at this point in the economic cycle, investors are concerned over how much of a decline in profitability the large mortgage lenders will see from lower gains on the sale of newly originated loans. With the market rate on 10-year U.S. Treasury bonds rising by about 40 basis points to roughly 2% over the past two months, mortgage-backed securities are also seeing higher yields.