Head to Head Contrast: Fifth Third Bancorp (NASDAQ:FITB) and Five Star Bancorp (NASDAQ:FSBC)

Five Star Bancorp (NASDAQ:FSBC) and Fifth Third Bancorp (NASDAQ:FITB) are both finance companies, but which is the superior investment? We will compare the two companies based on the strength of their profitability, analyst recommendations, risk, institutional ownership, dividends, valuation and earnings.

Earnings & Valuation

This table compares Five Star Bancorp and Fifth Third Bancorp”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Five Star Bancorp	$131.69 million	4.47	$45.67 million	$2.28	12.11
Fifth Third Bancorp	$8.29 billion	3.00	$2.31 billion	$3.15	11.81

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

Volatility & Risk

Five Star Bancorp has a beta of 0.52, suggesting that its share price is 48% less volatile than the S&P 500. Comparatively, Fifth Third Bancorp has a beta of 0.89, suggesting that its share price is 11% less volatile than the S&P 500.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Five Star Bancorp	21.40%	12.89%	1.25%
Fifth Third Bancorp	17.43%	14.10%	1.16%

Dividends

Five Star Bancorp pays an annual dividend of $0.80 per share and has a dividend yield of 2.9%. Fifth Third Bancorp pays an annual dividend of $1.48 per share and has a dividend yield of 4.0%. Five Star Bancorp pays out 35.1% of its earnings in the form of a dividend. Fifth Third Bancorp pays out 47.0% 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. Fifth Third Bancorp is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Recommendations

This is a breakdown of current ratings and price targets for Five Star Bancorp and Fifth Third Bancorp, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Five Star Bancorp	0	1	4	0	2.80
Fifth Third Bancorp	0	6	13	1	2.75

Five Star Bancorp presently has a consensus price target of $35.00, indicating a potential upside of 26.81%. Fifth Third Bancorp has a consensus price target of $46.78, indicating a potential upside of 25.75%. Given Five Star Bancorp’s stronger consensus rating and higher possible upside, equities analysts plainly believe Five Star Bancorp is more favorable than Fifth Third Bancorp.

Insider and Institutional Ownership

46.9% of Five Star Bancorp shares are held by institutional investors. Comparatively, 83.8% of Fifth Third Bancorp shares are held by institutional investors. 21.7% of Five Star Bancorp shares are held by company insiders. Comparatively, 0.5% of Fifth Third Bancorp shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Summary

Fifth Third Bancorp beats Five Star Bancorp on 10 of the 18 factors compared between the two stocks.

About Five Star Bancorp

Five Star Bancorp operates as the bank holding company for Five Star Bank that provides a range of banking products and services to small and medium-sized businesses, professionals, and individuals in Northern California. It accepts various deposits, such as money market accounts, noninterest-bearing and interest checking accounts, savings accounts, term certificate accounts, and time deposits. The company also offers loan products, including commercial and residential real estate loans; commercial loans; commercial land loans; farmland loans; commercial and residential construction loans; and consumer and other loans, as well as operating lines of credit. In addition, it provides debit cards; and remote deposit capture, online and mobile banking, and direct deposit services. Five Star Bancorp was founded in 1999 and is headquartered in Rancho Cordova, California.

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.