Investors overreacted, but this week’s Stock of the Week is getting stronger.

Fifth Third Bancorp (FITB) has $146 billion in assets…more than 1,200 full-service banking centers…and a well-focused geographical footprint that includes Ohio, Florida, Georgia, Illinois, Indiana, Kentucky, Michigan, North Carolina, Tennessee, West Virginia and Georgia.

But investors became worried about its recent $4.7 billion acquisition of Chicago-based MB Financial—concerned both by the size of the deal and the price. That concern is misplaced. The acquisition, despite a somewhat high cost, will improve Fifth Third’s already solid market share, geographic footprint and customer base. The overreaction creates an opportunity for investors focusing on the longer term. They can collect a sizable dividend as economies of scale and the strength of Fifth Third’s mostly Midwestern operations make this high-quality regional bank even stronger.

Revenue was $6.95 billion last year and will likely rise to $7.54 billion this year and $7.74 billion in 2020. The dividend of $0.88/share/yr. recently yielded 3.05% and appears secure.

Fiscal year: December. Earnings per share: 2020 est./$3.10…2019 est./$2.90…2018/$2.32.

John Buckingham is chief investment officer at AFAM Division, Kovitz Investment Group, Aliso Viejo, California, which manages $5 billion…portfolio manager of the $80 million Al Frank Fund (VALUX)…and editor of The Prudent Speculator.

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