TriCo Bancshares (NASDAQ: TCBK) and Fifth Third Bancorp (NASDAQ:FITB) are both financials companies, but which is the better stock? We will contrast the two businesses based on the strength of their dividends, institutional ownership, earnings, analyst recommendations, risk, profitability and valuation.

Earnings and Valuation

This table compares TriCo Bancshares 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
TriCo Bancshares $218.27 million 4.11 $44.81 million $2.16 18.12
Fifth Third Bancorp $6.89 billion 3.31 $1.56 billion $2.65 12.18

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

Profitability

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

Net Margins Return on Equity Return on Assets
TriCo Bancshares 21.87% 10.17% 1.10%
Fifth Third Bancorp 25.81% 9.58% 1.02%

Risk and Volatility

TriCo Bancshares has a beta of 0.91, meaning that its stock price is 9% less volatile than the S&P 500. Comparatively, Fifth Third Bancorp has a beta of 1.35, meaning that its stock price is 35% more volatile than the S&P 500.

Dividends

TriCo Bancshares pays an annual dividend of $0.68 per share and has a dividend yield of 1.7%. Fifth Third Bancorp pays an annual dividend of $0.64 per share and has a dividend yield of 2.0%. TriCo Bancshares pays out 31.5% of its earnings in the form of a dividend. Fifth Third Bancorp pays out 24.2% 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 is clearly the better dividend stock, given its higher yield and lower payout ratio.

Analyst Ratings

This is a breakdown of current ratings and target prices for TriCo Bancshares and Fifth Third Bancorp, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
TriCo Bancshares 0 3 0 0 2.00
Fifth Third Bancorp 3 17 2 0 1.95

TriCo Bancshares presently has a consensus price target of $41.00, suggesting a potential upside of 4.78%. Fifth Third Bancorp has a consensus price target of $29.25, suggesting a potential downside of 9.39%. Given TriCo Bancshares’ stronger consensus rating and higher possible upside, equities research analysts clearly believe TriCo Bancshares is more favorable than Fifth Third Bancorp.

Institutional & Insider Ownership

69.9% of TriCo Bancshares shares are owned by institutional investors. Comparatively, 83.9% of Fifth Third Bancorp shares are owned by institutional investors. 9.1% of TriCo Bancshares shares are owned by insiders. Comparatively, 0.4% of Fifth Third Bancorp shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Summary

Fifth Third Bancorp beats TriCo Bancshares on 9 of the 16 factors compared between the two stocks.

About TriCo Bancshares

TriCo Bancshares is a bank holding company. The Company’s principal subsidiary is Tri Counties Bank, a California-chartered commercial bank (the Bank). The Bank offers banking services to retail customers and small to medium-sized businesses through 68 branch offices in Northern and Central California. As of December 31, 2016, the Bank was engaged in the general commercial banking business in 26 counties in Northern and Central California. The Bank operated from 58 traditional branches and 10 in-store branches, as of December 31, 2016. The Bank conducts a commercial banking business, including accepting demand, savings and time deposits and making commercial, real estate, and consumer loans. It also offers installment note collection, issues cashier’s checks, sells travelers checks and provides safe deposit boxes and other customary banking services.

About Fifth Third Bancorp

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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