South State (NASDAQ:SSB) and Fifth Third Bancorp (NASDAQ:FITB) are both finance companies, but which is the better business? We will contrast the two businesses based on the strength of their institutional ownership, dividends, analyst recommendations, profitability, earnings, valuation and risk.
Institutional & Insider Ownership
76.0% of South State shares are held by institutional investors. Comparatively, 79.2% of Fifth Third Bancorp shares are held by institutional investors. 1.4% of South State 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 company will outperform the market over the long term.
Profitability
This table compares South State and Fifth Third Bancorp's net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets |
---|
South State | 8.18% | 6.67% | 0.85% |
Fifth Third Bancorp | 17.50% | 7.52% | 0.80% |
Analyst Recommendations
This is a summary of current ratings for South State and Fifth Third Bancorp, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score |
---|
South State | 0 | 3 | 3 | 0 | 2.50 |
Fifth Third Bancorp | 0 | 5 | 12 | 1 | 2.78 |
South State presently has a consensus target price of $74.60, suggesting a potential downside of 7.56%. Fifth Third Bancorp has a consensus target price of $34.4605, suggesting a potential downside of 9.15%. Given South State's higher possible upside, equities analysts clearly believe South State is more favorable than Fifth Third Bancorp.
Volatility & Risk
South State has a beta of 1.08, indicating that its share price is 8% more volatile than the S&P 500. Comparatively, Fifth Third Bancorp has a beta of 1.63, indicating that its share price is 63% more volatile than the S&P 500.
Dividends
South State pays an annual dividend of $1.88 per share and has a dividend yield of 2.3%. Fifth Third Bancorp pays an annual dividend of $1.08 per share and has a dividend yield of 2.8%. South State pays out 33.4% 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. South State has increased its dividend for 1 consecutive years and Fifth Third Bancorp has increased 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.
Earnings and Valuation
This table compares South State and Fifth Third Bancorp's top-line revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio |
---|
South State | $734.39 million | 7.81 | $186.48 million | $5.63 | 14.34 |
Fifth Third Bancorp | $9.79 billion | 2.77 | $2.51 billion | $2.77 | 13.75 |
Fifth Third Bancorp has higher revenue and earnings than South State. Fifth Third Bancorp is trading at a lower price-to-earnings ratio than South State, indicating that it is currently the more affordable of the two stocks.
Summary
Fifth Third Bancorp beats South State on 11 of the 18 factors compared between the two stocks.