Financial Contrast: Truist Financial (NYSE:TFC) and Fifth Third Bancorp (NASDAQ:FITB)

Truist Financial (NYSE:TFC) and Fifth Third Bancorp (NASDAQ:FITB) are both large-cap finance companies, but which is the superior stock? We will compare the two businesses based on the strength of their valuation, institutional ownership, analyst recommendations, profitability, dividends, risk and earnings.

Analyst Recommendations

This is a breakdown of current ratings and price targets for Truist Financial and Fifth Third Bancorp, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Truist Financial	0	6	9	2	2.76
Fifth Third Bancorp	0	5	10	2	2.82

Truist Financial presently has a consensus target price of $48.47, suggesting a potential upside of 3.37%. Fifth Third Bancorp has a consensus target price of $47.80, suggesting a potential upside of 4.44%. Given Fifth Third Bancorp’s stronger consensus rating and higher probable upside, analysts clearly believe Fifth Third Bancorp is more favorable than Truist Financial.

Valuation & Earnings

This table compares Truist Financial and Fifth Third Bancorp”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Truist Financial	$24.25 billion	2.49	$4.82 billion	$3.67	12.78
Fifth Third Bancorp	$13.28 billion	2.28	$2.31 billion	$3.22	14.21

Truist Financial has higher revenue and earnings than Fifth Third Bancorp. Truist Financial 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.

Dividends

Truist Financial pays an annual dividend of $2.08 per share and has a dividend yield of 4.4%. Fifth Third Bancorp pays an annual dividend of $1.48 per share and has a dividend yield of 3.2%. Truist Financial pays out 56.7% of its earnings in the form of a dividend. Fifth Third Bancorp pays out 46.0% 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. Fifth Third Bancorp has raised its dividend for 14 consecutive years.

Volatility & Risk

Truist Financial has a beta of 0.88, suggesting that its stock price is 12% less volatile than the S&P 500. Comparatively, Fifth Third Bancorp has a beta of 0.93, suggesting that its stock price is 7% less volatile than the S&P 500.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Truist Financial	16.82%	8.69%	0.95%
Fifth Third Bancorp	17.97%	13.31%	1.15%

Insider and Institutional Ownership

71.3% of Truist Financial shares are held by institutional investors. Comparatively, 83.8% of Fifth Third Bancorp shares are held by institutional investors. 0.1% of Truist Financial 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 is poised for long-term growth.

Summary

Fifth Third Bancorp beats Truist Financial on 12 of the 17 factors compared between the two stocks.

About Truist Financial

Truist Financial Corporation, a financial services company, provides banking and trust services in the Southeastern and Mid-Atlantic United States. The company operates through three segments: Consumer Banking and Wealth, Corporate and Commercial Banking, and Insurance Holdings.Its deposit products include noninterest-bearing checking, interest-bearing checking, savings, and money market deposit accounts, as well as certificates of deposit and individual retirement accounts. The company also provides funding; asset management; automobile lending; credit card lending; consumer finance; home equity and mortgage lending; other direct retail lending; insurance; investment brokerage; mobile/online banking; payment solutions; point-of-sale lending; retail and small business deposit products; small business lending; and wealth management/private banking services. In addition, it offers asset based lending, investment banking and capital market, institutional trust, insurance premium finance, derivatives, commercial lending, international banking, leasing, merchant, commercial deposit and treasury, floor plan, mortgage warehouse lending, real estate lending, and supply chain financing services. Further, the company provides insurance brokerage, retail and wholesale brokerage, securities underwriting and market making, loan syndication, and investment management and advisory services. The company was formerly known as BB&T Corporation and changed its name to Truist Financial Corporation in December 2019. Truist Financial Corporation was founded in 1872 and is headquartered in Charlotte, North Carolina.

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.