Financial Survey: Fifth Third Bancorp (NASDAQ:FITB) versus Cadence Bank (NYSE:CADE)

Fifth Third Bancorp (NASDAQ:FITB) and Cadence Bank (NYSE:CADE) are both finance companies, but which is the superior business? We will contrast the two companies based on the strength of their valuation, earnings, profitability, dividends, analyst recommendations, risk and institutional ownership.

Earnings & Valuation

This table compares Fifth Third Bancorp and Cadence Bank”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Fifth Third Bancorp	$8.17 billion	3.74	$2.35 billion	$3.01	15.13
Cadence Bank	$2.19 billion	3.02	$542.30 million	$3.48	10.46

Fifth Third Bancorp has higher revenue and earnings than Cadence Bank. Cadence Bank 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.

Institutional and Insider Ownership

83.8% of Fifth Third Bancorp shares are owned by institutional investors. Comparatively, 84.6% of Cadence Bank shares are owned by institutional investors. 0.5% of Fifth Third Bancorp shares are owned by company insiders. Comparatively, 2.2% of Cadence Bank shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Fifth Third Bancorp	16.58%	14.58%	1.19%
Cadence Bank	25.99%	8.95%	0.95%

Dividends

Fifth Third Bancorp pays an annual dividend of $1.48 per share and has a dividend yield of 3.2%. Cadence Bank pays an annual dividend of $1.00 per share and has a dividend yield of 2.7%. Fifth Third Bancorp pays out 49.2% of its earnings in the form of a dividend. Cadence Bank pays out 28.7% 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 Cadence Bank has raised its dividend for 13 consecutive years. Fifth Third Bancorp is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Volatility and Risk

Fifth Third Bancorp has a beta of 1.22, suggesting that its share price is 22% more volatile than the S&P 500. Comparatively, Cadence Bank has a beta of 0.98, suggesting that its share price is 2% less volatile than the S&P 500.

Analyst Ratings

This is a breakdown of current recommendations for Fifth Third Bancorp and Cadence Bank, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Fifth Third Bancorp	0	9	10	0	2.53
Cadence Bank	0	5	6	1	2.67

Fifth Third Bancorp currently has a consensus target price of $44.81, indicating a potential downside of 1.63%. Cadence Bank has a consensus target price of $36.63, indicating a potential upside of 0.59%. Given Cadence Bank’s stronger consensus rating and higher probable upside, analysts clearly believe Cadence Bank is more favorable than Fifth Third Bancorp.

Summary

Fifth Third Bancorp beats Cadence Bank on 10 of the 18 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 Cadence Bank

Cadence Bank provides commercial banking and financial services. Its products and services include consumer banking, consumer loans, mortgages, home equity lines and loans, credit cards, commercial and business banking, treasury management, specialized and asset-based lending, commercial real estate, equipment financing, and correspondent banking services. The company’s products and services also comprise small business administration lending, foreign exchange, wealth management, investment and trust, financial planning, retirement plan management, and personal and business insurance services. Cadence Bank was founded in 1876 and is headquartered in Tupelo, Mississippi.