Value investing is a popular way to find great stocks under any market conditions. Value stocks often fly under the radar, but are compelling buys. Who would pass up a huge discount when compared to fair value? Well, lots of investors would because they are busy chasing after the growth stock du jour. Another banking stock may be selling at a discount, and that is Fifth Third Bancorp, so let’s take a look. A key metric that value investors should look at is the Price to Earnings Ratio. In this regard, Fifth Third has a trailing twelve month PE ratio of 10.14. This level compares favorably with the S&P 500 which comes in at about 18.45, and is below its own five-year average of 12.06. This is also more favorable then the banking sector average PE of about 14.57.
Looking at the Price/Sales ratio, Fifth Third has a ratio of about 2.33. Again, this is a bit lower than the S&P 500 average of 3.26, and its own five-year average.
Meanwhile, the company’s recent earnings estimates have not been favorable. For the quarter, two analysts have increased estimates while three analysts have lowered estimates, while the full year estimate has seen one analyst increase numbers and six have lowered theirs.
Overall, the analysts’ estimates have mildly impacted the stock. In general, the stock has been going sideways while marking time.
So, value investors might want to wait for estimates and analyst sentiment to turn around, but once that happens, this stock could be a compelling pick.
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