Reviewing U.S. Bancorp (NYSE:USB) and Fifth Third Bancorp (NASDAQ:FITB)

Fifth Third Bancorp (NASDAQ:FITB) and U.S. Bancorp (NYSE:USB) are both large-cap finance companies, but which is the better investment? We will contrast the two businesses based on the strength of their profitability, earnings, valuation, risk, institutional ownership, dividends and analyst recommendations.

Dividends

Fifth Third Bancorp pays an annual dividend of $1.48 per share and has a dividend yield of 3.6%. U.S. Bancorp pays an annual dividend of $2.00 per share and has a dividend yield of 4.4%. Fifth Third Bancorp pays out 47.0% of its earnings in the form of a dividend. U.S. Bancorp pays out 49.5% 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. Fifth Third Bancorp has raised its dividend for 14 consecutive years and U.S. Bancorp has raised its dividend for 14 consecutive years.

Insider and Institutional Ownership

83.8% of Fifth Third Bancorp shares are owned by institutional investors. Comparatively, 77.6% of U.S. Bancorp shares are owned by institutional investors. 0.5% of Fifth Third Bancorp shares are owned by insiders. Comparatively, 0.2% of U.S. Bancorp shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Risk and Volatility

Fifth Third Bancorp has a beta of 0.9, suggesting that its stock price is 10% less volatile than the S&P 500. Comparatively, U.S. Bancorp has a beta of 0.99, suggesting that its stock price is 1% less volatile than the S&P 500.

Analyst Recommendations

This is a summary of recent ratings for Fifth Third Bancorp and U.S. Bancorp, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Fifth Third Bancorp	0	5	12	2	2.84
U.S. Bancorp	1	8	14	0	2.57

Fifth Third Bancorp presently has a consensus target price of $47.53, suggesting a potential upside of 14.50%. U.S. Bancorp has a consensus target price of $50.72, suggesting a potential upside of 10.75%. Given Fifth Third Bancorp’s stronger consensus rating and higher probable upside, equities analysts clearly believe Fifth Third Bancorp is more favorable than U.S. Bancorp.

Profitability

This table compares Fifth Third Bancorp and U.S. Bancorp’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Fifth Third Bancorp	17.65%	13.64%	1.14%
U.S. Bancorp	15.70%	13.02%	1.00%

Earnings & Valuation

This table compares Fifth Third Bancorp and U.S. Bancorp”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Fifth Third Bancorp	$13.28 billion	2.09	$2.31 billion	$3.15	13.18
U.S. Bancorp	$42.71 billion	1.67	$6.30 billion	$4.04	11.33

U.S. Bancorp has higher revenue and earnings than Fifth Third Bancorp. U.S. Bancorp is trading at a lower price-to-earnings ratio than Fifth Third Bancorp, indicating that it is currently the more affordable of the two stocks.

Summary

Fifth Third Bancorp beats U.S. Bancorp on 11 of the 17 factors compared between the two stocks.

About Fifth Third Bancorp

Fifth Third Bancorp operates as the bank holding company for Fifth Third Bank, National Association that engages in the provision of a range of financial products and services in the United States. It operates through three segments: Commercial Banking, Consumer and Small Business Banking, and Wealth and Asset Management. The Commercial Banking segment offers credit intermediation, cash management, and financial services; lending and depository products; and cash management, foreign exchange and international trade finance, derivatives and capital markets services, asset-based lending, real estate finance, public finance, commercial leasing, and syndicated finance for business, government, and professional customers. The Consumer and Small Banking segment provides a range of deposit and loan products to individuals and small businesses; home equity loans and lines of credit; credit cards; and cash management services. This segment also engages in the residential mortgage that include origination, retention and servicing of residential mortgage loans, sales and securitizations of loans, and hedging activities; indirect lending, including extending loans to consumers through automobile dealers, motorcycle dealers, powersport dealers, recreational vehicle dealers, and marine dealers; and home improvement and solar energy installation loans through contractors and installers. The Wealth & Asset Management segment provides various wealth management services for individuals, companies, and not-for-profit organizations. It offers retail brokerage services to individual clients; and broker dealer services to the institutional marketplace. This segment also provides wealth planning, investment management, banking, insurance, and trust and estate services; and advisory services for institutional clients comprising middle market businesses, non-profits, states, and municipalities. The company was founded in 1858 and is headquartered in Cincinnati, Ohio.

About U.S. Bancorp

U.S. Bancorp, a financial services holding company, provides various financial services to individuals, businesses, institutional organizations, governmental entities, and other financial institutions in the United States. It operates through Wealth, Corporate, Commercial and Institutional Banking; Consumer and Business Banking; Payment Services; and Treasury and Corporate Support segments. The company offers depository services, including checking accounts, savings accounts, and time certificate contracts; and lending services, such as traditional credit products and credit card services, lease financing and import/export trade, asset-backed lending, agricultural finance, and other products. It also provides ancillary services comprising capital markets, treasury management, and receivable lock-box collection services to corporate and governmental entity customers. In addition, the company offers asset management and fiduciary services for individuals, estates, foundations, business corporations, and charitable organizations. Further, it provides investment and insurance products to its customers principally within its domestic markets, as well as fund administration services to mutual and other funds. Additionally, the company provides corporate and purchasing card, and corporate trust services. Furthermore, it offers trust and investment management, merchant and ATM processing, mortgage banking, insurance, and brokerage and leasing services. U.S. Bancorp was founded in 1863 and is headquartered in Minneapolis, Minnesota.