Banco Bradesco (NYSE: BBD) and Fifth Third Bank (NASDAQ:FITB) are both large-cap finance companies, but which is the superior business? We will compare the two companies based on the strength of their risk, valuation, earnings, dividends, institutional ownership, profitability and analyst recommendations.
Banco Bradesco pays an annual dividend of $0.06 per share and has a dividend yield of 0.6%. Fifth Third Bank pays an annual dividend of $0.64 per share and has a dividend yield of 2.0%. Banco Bradesco pays out 6.7% of its earnings in the form of a dividend. Fifth Third Bank pays out 23.9% 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. Banco Bradesco has raised its dividend for 4 consecutive years.
Volatility & Risk
Banco Bradesco has a beta of 1.83, meaning that its share price is 83% more volatile than the S&P 500. Comparatively, Fifth Third Bank has a beta of 1.32, meaning that its share price is 32% more volatile than the S&P 500.
Earnings and Valuation
This table compares Banco Bradesco and Fifth Third Bank’s gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Banco Bradesco||$46.46 billion||1.60||$4.59 billion||$0.89||11.36|
|Fifth Third Bank||$7.71 billion||2.83||$2.19 billion||$2.68||11.86|
Banco Bradesco has higher revenue and earnings than Fifth Third Bank. Banco Bradesco is trading at a lower price-to-earnings ratio than Fifth Third Bank, indicating that it is currently the more affordable of the two stocks.
This table compares Banco Bradesco and Fifth Third Bank’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Fifth Third Bank||27.08%||9.65%||1.03%|
Insider and Institutional Ownership
2.6% of Banco Bradesco shares are held by institutional investors. Comparatively, 84.5% of Fifth Third Bank shares are held by institutional investors. 0.4% of Fifth Third Bank shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.
This is a summary of current ratings and price targets for Banco Bradesco and Fifth Third Bank, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Fifth Third Bank||2||14||2||0||2.00|
Banco Bradesco currently has a consensus target price of $12.40, suggesting a potential upside of 22.65%. Fifth Third Bank has a consensus target price of $31.12, suggesting a potential downside of 2.08%. Given Banco Bradesco’s stronger consensus rating and higher possible upside, research analysts clearly believe Banco Bradesco is more favorable than Fifth Third Bank.
Banco Bradesco beats Fifth Third Bank on 10 of the 17 factors compared between the two stocks.
Banco Bradesco Company Profile
Banco Bradesco S.A. provides banking and financial products and services to individuals, companies, and corporations and institutions. The company operates in two segments, Banking; and Insurance, Pension Plans and Capitalization Bond. It accepts demand and time deposits, checking and savings accounts, interbank deposits from financial institutions, and accounts for salary purposes. The company also offers loans comprising personal and short-term loans, vehicle financing, overdraft loans, and payroll-deductible loans; housing loans; government-funded long-term loans, such as BNDES onlending/FINAME; rural loans; and microcredit to middle- and low-income individuals, as well as small companies. In addition, it offers other corporate loans and advances, such as short-term loans; working capital loans; corporate overdraft loans; discounting trade receivables, promissory notes, checks, credit card and supplier receivables, etc.; financing for purchase and sale of goods and services; and investment lines for acquisition of assets and machinery. Further, the company provides life and personal accident, health, automobile, property, casualty, and liability insurance products, as well as insurance against miscellaneous events; reinsurance products; pension plans; and capitalization bonds. Additionally, it offers credit, debit, and pre-paid cards; cash management solutions; public authority solutions; asset management services; services related to capital markets and investment banking activities; intermediation and trading services; capital markets solutions; international banking services; import and export financing; consortiums; and receipts and payments solutions. As of December 31, 2016, the company operated through a network of 5,314 branches, 4,834 service centers and electronic in-company service centers, and 36,119 active ATMs in Brazil; and 3 branches internationally. Banco Bradesco S.A. was founded in 1943 and is headquartered in Osasco, Brazil.
Fifth Third Bank Company Profile
Fifth Third Bancorp is a bank holding company and a financial holding company. The Company conducts its principal lending, deposit gathering, transaction processing and service advisory activities through its banking and non-banking subsidiaries from banking centers located throughout the Midwestern and Southeastern regions of the United States. It operates through four segments: Commercial Banking, Branch Banking, Consumer Lending, and Wealth and Asset Management. It diversifies its loan and lease portfolio by offering a range of loan and lease products with various payment terms and rate structures. It offers commercial and industrial loans, commercial mortgage loans, commercial construction loans, commercial leases, residential mortgage loans, home equity, automobile loans, credit card, and other consumer loans and leases. It offers various types of deposits, such as demand deposits, interest checking deposits, savings deposits, money market deposits and transaction deposits.
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