Financial Analysis: Dnb Asa (DNHBY) versus Fifth Third Bank (FITB)

Fifth Third Bank (NASDAQ: FITB) and Dnb Asa (OTCMKTS:DNHBY) are both large-cap finance companies, but which is the better business? We will contrast the two companies based on the strength of their valuation, earnings, analyst recommendations, institutional ownership, dividends, profitability and risk.

Institutional & Insider Ownership

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84.6% of Fifth Third Bank shares are owned by institutional investors. Comparatively, 0.1% of Dnb Asa shares are owned by institutional investors. 0.4% of Fifth Third 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.

Dividends

Fifth Third Bank pays an annual dividend of $0.64 per share and has a dividend yield of 2.0%. Dnb Asa pays an annual dividend of $0.56 per share and has a dividend yield of 2.9%. Fifth Third Bank pays out 22.5% of its earnings in the form of a dividend. Dnb Asa pays out 36.1% 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.

Profitability

This table compares Fifth Third Bank and Dnb Asa’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%
Dnb Asa 30.04% 10.27% 0.77%

Earnings and Valuation

This table compares Fifth Third Bank and Dnb Asa’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Fifth Third Bank $7.71 billion 2.88 $2.19 billion $2.85 11.34
Dnb Asa $8.42 billion 3.75 $2.53 billion $1.55 12.53

Dnb Asa has higher revenue and earnings than Fifth Third Bank. Fifth Third Bank is trading at a lower price-to-earnings ratio than Dnb Asa, indicating that it is currently the more affordable of the two stocks.

Volatility & Risk

Fifth Third Bank has a beta of 1.31, suggesting that its stock price is 31% more volatile than the S&P 500. Comparatively, Dnb Asa has a beta of 0.94, suggesting that its stock price is 6% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent ratings and target prices for Fifth Third Bank and Dnb Asa, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Fifth Third Bank 2 14 3 0 2.05
Dnb Asa 0 0 0 0 N/A

Fifth Third Bank currently has a consensus target price of $31.00, suggesting a potential downside of 4.05%. Given Fifth Third Bank’s higher possible upside, equities analysts plainly believe Fifth Third Bank is more favorable than Dnb Asa.

Summary

Fifth Third Bank beats Dnb Asa on 8 of the 15 factors compared between the two stocks.

About Fifth Third Bank

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.

About Dnb Asa

DNB ASA provides various banking products and services for retail and corporate customers in Norway and internationally. It operates through five segments: Personal customers, Small and Medium-Sized Enterprises, Large Corporates and International Customers, Trading, and Traditional Pension Products. The company offers savings and investment products, including saving accounts, home savings products, equities, retirement savings, fixed rate deposits, exchange traded products, bonds and commercial papers, and asset management services; and loans, such as home mortgages, car and consumer loans, installment loans, trade finance, and export financing, as well as overdraft facilities, bank guarantees, and leasing and factoring services. It also provides various cards; a range of insurance products comprising car, boat, motor vehicle, household contents, home, holiday home, travel, and life insurance products, as well as pet insurance for cats and dogs; and pension plans. In addition, the company offers investment banking advisory and financing services, such as mergers and acquisitions, and equity and debt capital markets for corporations and private equity firms; and foreign exchange and treasury, cash management, payments, research, commodities, corporate finance, interest rates, securities, real estate broking, and Internet and mobile banking services. It offers its products and services to various sectors, including energy; financial institutions; healthcare; manufacturing; packaging and forest products; seafood; shipping, offshore, and logistics; and telecom, media, and technology. The company distributes its products and services through its distribution network comprising branches, telephone banking, digital banking, and real estate broking, as well as external channels, such as post offices, and in-store postal and banking outlets. DNB ASA was founded in 1822 and is headquartered in Oslo, Norway.

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