Pinnacle Financial Partners (NASDAQ:PNFP) and Fifth Third Bancorp (NASDAQ:FITB) are both finance companies, but which is the superior stock? We will contrast the two companies based on the strength of their earnings, analyst recommendations, institutional ownership, profitability, valuation, dividends and risk.
Dividends
Pinnacle Financial Partners pays an annual dividend of $0.72 per share and has a dividend yield of 0.8%. Fifth Third Bancorp pays an annual dividend of $1.08 per share and has a dividend yield of 2.8%. Pinnacle Financial Partners pays out 13.4% of its earnings in the form of a dividend. Fifth Third Bancorp pays out 39.0% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Pinnacle Financial Partners has raised its dividend for 1 consecutive years and Fifth Third Bancorp has raised its dividend for 4 consecutive years. Fifth Third Bancorp is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Institutional and Insider Ownership
75.4% of Pinnacle Financial Partners shares are held by institutional investors. Comparatively, 79.2% of Fifth Third Bancorp shares are held by institutional investors. 3.0% of Pinnacle Financial Partners shares are held by company insiders. Comparatively, 0.5% of Fifth Third Bancorp shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.
Earnings & Valuation
This table compares Pinnacle Financial Partners and Fifth Third Bancorp's gross revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio |
|---|
| Pinnacle Financial Partners | $1.33 billion | 5.24 | $400.88 million | $5.37 | 17.11 |
| Fifth Third Bancorp | $9.79 billion | 2.78 | $2.51 billion | $2.77 | 13.82 |
Fifth Third Bancorp has higher revenue and earnings than Pinnacle Financial Partners. Fifth Third Bancorp is trading at a lower price-to-earnings ratio than Pinnacle Financial Partners, indicating that it is currently the more affordable of the two stocks.
Analyst Ratings
This is a breakdown of recent recommendations and price targets for Pinnacle Financial Partners and Fifth Third Bancorp, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score |
|---|
| Pinnacle Financial Partners | 0 | 2 | 5 | 0 | 2.71 |
| Fifth Third Bancorp | 0 | 5 | 12 | 1 | 2.78 |
Pinnacle Financial Partners currently has a consensus target price of $70.75, indicating a potential downside of 23.00%. Fifth Third Bancorp has a consensus target price of $34.4605, indicating a potential downside of 9.98%. Given Fifth Third Bancorp's stronger consensus rating and higher probable upside, analysts plainly believe Fifth Third Bancorp is more favorable than Pinnacle Financial Partners.
Profitability
This table compares Pinnacle Financial Partners and Fifth Third Bancorp's net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets |
|---|
| Pinnacle Financial Partners | 22.43% | 6.88% | 0.99% |
| Fifth Third Bancorp | 17.50% | 7.52% | 0.80% |
Volatility & Risk
Pinnacle Financial Partners has a beta of 1.37, indicating that its stock price is 37% more volatile than the S&P 500. Comparatively, Fifth Third Bancorp has a beta of 1.63, indicating that its stock price is 63% more volatile than the S&P 500.
Summary
Fifth Third Bancorp beats Pinnacle Financial Partners on 11 of the 18 factors compared between the two stocks.
