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Fifth Third Bancorp (FITB)

Company Dividend Discount ModelIndustry: Banks - RegionalSector: Financial Services

Valuation Snapshot

Stable Growth$84.17 - $224.69$128.95
Multi-Stage$59.08 - $64.47$61.73
Blended Fair Value$95.34
Current Price$44.55
Upside114.01%
DecisionBuy

Dividend History & Growth Metrics (10Y)

Metric5Y CAGR10Y CAGR2024202320222021202020192018201720162015
DPS12.25%10.77%1.741.571.371.331.270.980.690.640.600.62
YoY Growth--10.94%14.35%3.34%4.55%30.00%41.33%8.60%6.97%-4.74%-0.24%
Dividend Yield--4.44%4.28%5.15%3.08%3.39%6.58%2.63%2.00%2.34%3.74%

Stable Growth Model (Adjusted)

(USD in Millions except Per Share Data)
Net Income To Common (M)2,412.00
(-) Cash Dividends Paid (M)1,155.00
(=) Cash Retained (M)1,257.00
MetricLOWBASEHIGH
Required Retention Ratio20.0%12.5%7.5%
(=) Cash Required (M)482.40301.50180.90
Cash Retained (M)1,257.001,257.001,257.00
(-) Cash Required (M)-482.40-301.50-180.90
(=) Excess Retained (M)774.60955.501,076.10
(/) Shares Outstanding (M)675.60675.60675.60
(=) Excess Retained per Share1.151.411.59
LTM Dividend per Share1.711.711.71
(+) Excess Retained per Share1.151.411.59
(=) Adjusted Dividend2.863.123.30
WACC / Discount Rate9.08%9.08%9.08%
Growth Rate5.50%6.50%7.50%
Fair Value$84.17$128.95$224.69
Upside / Downside88.93%189.45%404.35%

Multi-Stage Model: Projections

(USD in Millions)
MetricTTMDec-27Dec-28Dec-29Dec-30Dec-31Terminal
Net Income (M)2,412.002,568.782,735.752,913.573,102.963,304.653,403.79
Payout Ratio47.89%56.31%64.73%73.15%81.58%90.00%92.50%
Projected Dividends (M)1,155.001,446.441,770.892,131.402,531.302,974.183,148.50

Multi-Stage Valuation

MetricLOWBASEHIGH
WACC / Discount Rate9.08%9.08%9.08%
Growth Rate5.50%6.50%7.50%
Year 1 PV (M)1,313.591,326.041,338.49
Year 2 PV (M)1,460.521,488.341,516.42
Year 3 PV (M)1,596.391,642.221,688.91
Year 4 PV (M)1,721.771,787.981,856.09
Year 5 PV (M)1,837.201,925.942,018.07
PV of Terminal Value (M)31,988.1733,533.2135,137.38
Equity Value (M)39,917.6341,703.7143,555.35
Shares Outstanding (M)675.60675.60675.60
Fair Value$59.08$61.73$64.47
Upside / Downside32.63%38.56%44.71%

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