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How much a stock's price changes over time is a significant driver for most investors. Not only can price performance impact your portfolio, but it can help you compare investment results across sectors and industries as well.
Another factor that can influence investors is FOMO, or the fear of missing out, especially with tech giants and popular consumer-facing stocks.
What if you'd invested in Fifth Third Bancorp (FITB) ten years ago? It may not have been easy to hold on to FITB for all that time, but if you did, how much would your investment be worth today?
Fifth Third Bancorp's Business In-Depth
With that in mind, let's take a look at Fifth Third Bancorp's main business drivers.
With assets of $206.9 billion, Cincinnati-based Fifth Third Bancorp has 1,098 full-service banking centers in 10 states throughout the Midwestern and Southeastern regions of the United States. In September 2019, Fifth Third received OCC's approval to convert from an Ohio state-chartered bank to a national bank.
Fifth Third classifies its operations into mainly four reportable segments. Firstly, Branch Banking provides deposit, loan and lease products, and credit cards to individuals and small businesses. Next, Consumer Lending includes mortgage and home equity lending, as well as other indirect lending activities.
Also, the company has a Commercial Banking unit, that provides financial services and products to large and middle-market businesses, governments and professional customers. The Wealth and Asset Management division offers investment alternatives to individuals, companies and non-profit organizations. These consist of proprietary mutual funds, securities brokerage and asset management services.
Lastly, Other segment includes unallocated portion of investment securities portfolio, securities gains and losses, non-core deposit funding, unassigned equity, provision expense above net charge-offs or benefit from reduction of allowance for loan losses, representation and warranty expense above actual losses or benefit from reduction of representation and warranty reserves, payment of preferred stock dividends and additional activities.
In March 2019, Fifth Third completed the acquisition of MB Financial, for a total consideration of $3.6 billion. In February 2018, it acquired Coker Capital, a healthcare M&A advisory firm. In 2017, it acquired R.G. McGraw Insurance Agency.
Notably, Fifth Third has exited its entire stake in all publicly-traded companies. In March 2019, the company exchanged its remaining shares of Worldpay Holdings, LLC for shares of Worldpay, Inc., and subsequently sold its shares, recording a gain of $562 million. During March and April 2019, Fifth Third exchanged its Class B units of GreenSky Holdings, LLC for Class A common stock of GreenSky, Inc., and subsequently sold all of the stock.
While anyone can invest, building a lucrative investment portfolio takes research, patience, and a little bit of risk. If you had invested in Fifth Third Bancorp ten years ago, you're probably feeling pretty good about your investment today.
According to our calculations, a $1000 investment made in May 2011 would be worth $3,142.21, or a 214.22% gain, as of May 5, 2021. Investors should keep in mind that this return excludes dividends but includes price appreciation.
In comparison, the S&P 500 gained 209.11% and the price of gold went up 16.11% over the same time frame.
Analysts are anticipating more upside for FITB.
Shares of Fifth Third have outperformed the industry in the past three months. It also has a decent earnings surprise history, with its earnings outpacing the Zacks Consensus Estimate in three of the trailing four quarters while missing in the other. Its first-quarter 2021 results reflected higher revenues, provision benefits and slightly higher costs. Rising loans and deposit balances and improving asset quality are likely to keep supporting the company’s financials in the upcoming quarters. However, rising expenses due to investments in branch digitization initiatives and margin pressure amid near-zero interest rates remain major concerns. Further, significant exposure to commercial loans is a headwind. Nevertheless, with support from a solid liquidity position, the bank is less exposed to credit risk in case of any economic downturn.
The stock has jumped 7.80% over the past four weeks. Additionally, no earnings estimate has gone lower in the past two months, compared to 12 higher, for fiscal 2021; the consensus estimate has moved up as well.
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Fifth Third Bancorp (FITB) : Free Stock Analysis Report
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