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Fifth Third Bancorp (FITB)

Company Dividend Discount ModelIndustry: Banks - RegionalSector: Financial Services

Valuation Snapshot

Stable Growth$83.75 - $222.16$128.06
Multi-Stage$58.90 - $64.27$61.53
Blended Fair Value$94.80
Current Price$44.55
Upside112.79%
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 Rate9.10%9.10%9.10%
Growth Rate5.50%6.50%7.50%
Fair Value$83.75$128.06$222.16
Upside / Downside87.98%187.45%398.67%

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 Rate9.10%9.10%9.10%
Growth Rate5.50%6.50%7.50%
Year 1 PV (M)1,313.371,325.821,338.27
Year 2 PV (M)1,460.031,487.841,515.92
Year 3 PV (M)1,595.601,641.401,688.08
Year 4 PV (M)1,720.631,786.801,854.87
Year 5 PV (M)1,835.691,924.352,016.41
PV of Terminal Value (M)31,867.4433,406.6535,004.77
Equity Value (M)39,792.7641,572.8743,418.30
Shares Outstanding (M)675.60675.60675.60
Fair Value$58.90$61.53$64.27
Upside / Downside32.21%38.12%44.26%

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