Prosperity Bancshares (NYSE:PB) and Fifth Third Bancorp (NASDAQ:FITB) are both finance companies, but which is the superior stock? We will compare the two companies based on the strength of their dividends, analyst recommendations, risk, profitability, institutional ownership, valuation and earnings.
Risk & Volatility
Prosperity Bancshares has a beta of 1.37, indicating that its share price is 37% 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.
Earnings & Valuation
This table compares Prosperity Bancshares and Fifth Third Bancorp's revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio |
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Prosperity Bancshares | $957.22 million | 7.17 | $332.55 million | $5.02 | 14.78 |
Fifth Third Bancorp | $9.79 billion | 2.57 | $2.51 billion | $2.77 | 12.74 |
Fifth Third Bancorp has higher revenue and earnings than Prosperity Bancshares. Fifth Third Bancorp is trading at a lower price-to-earnings ratio than Prosperity Bancshares, indicating that it is currently the more affordable of the two stocks.
Profitability
This table compares Prosperity Bancshares and Fifth Third Bancorp's net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets |
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Prosperity Bancshares | 37.67% | 8.42% | 1.54% |
Fifth Third Bancorp | 17.50% | 7.52% | 0.80% |
Dividends
Prosperity Bancshares pays an annual dividend of $1.96 per share and has a dividend yield of 2.6%. Fifth Third Bancorp pays an annual dividend of $1.08 per share and has a dividend yield of 3.1%. Prosperity Bancshares pays out 39.0% 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. Prosperity Bancshares 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 & Insider Ownership
76.7% of Prosperity Bancshares shares are owned by institutional investors. Comparatively, 79.2% of Fifth Third Bancorp shares are owned by institutional investors. 4.0% of Prosperity Bancshares shares are owned by insiders. Comparatively, 0.5% of Fifth Third Bancorp shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.
Analyst Ratings
This is a summary of recent ratings for Prosperity Bancshares and Fifth Third Bancorp, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score |
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Prosperity Bancshares | 1 | 5 | 6 | 0 | 2.42 |
Fifth Third Bancorp | 0 | 6 | 12 | 0 | 2.67 |
Prosperity Bancshares currently has a consensus target price of $69.5556, indicating a potential downside of 6.23%. Fifth Third Bancorp has a consensus target price of $29.3194, indicating a potential downside of 16.94%. Given Prosperity Bancshares' higher probable upside, research analysts plainly believe Prosperity Bancshares is more favorable than Fifth Third Bancorp.
Summary
Fifth Third Bancorp beats Prosperity Bancshares on 10 of the 17 factors compared between the two stocks.