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Fifth Third Is Paying You (More) To Be Patient As The Story Plays Out

July 7, 2019

Summary:

- Fifth Third recently raised its dividend by almost 10% and investors should expect more of the same in the years ahead.

- This regional bank has a solid long-term story to tell and, in my opinion, the recent acquisition will be a significant catalyst for FITB shares.

- I hold a position in Fifth Third and I plan to stay long the stock.

 

Fifth Third Bancorp's ($FITB) stock has been a major disappointment over the last year, as poor sentiment for the financials sector has outweighed what looks to be attractive valuations for the regional banks.

 

However, I believe that FITB shares currently look more attractive than they have in years, especially after you factor in the MB Financial acquisition (more on this below). Moreover, the bank recently increased its quarterly dividend by 9.1% (to $0.24) and authorized a new 100M share buyback program.

 

I believe that this large bank has several significant catalysts in place that have the potential to lead to outsized gains over the next 18-24 months and it helps that the bank is now paying you more to be patient.

 

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