Fifth Third Bancorp (FITB) Investors Could See a Higher Dividend

With projected earnings of $1.64 per share for 2013, this projected dividend increase would push the bank’s payout ratio to 29%, right at the Fed’s implied maximum. Investors will enjoy a dividend yield near 3% from a bank like Fifth Third Bancorp (NASDAQ:FITB), but the bank is

planning on returning even more capital to shareholders in the form of share repurchases:

Source: Fifth Third Press Release. 

Of this $1.7 billion, $750 million would be from the potential repurchase of trust preferred securities, which would be replaced by a similar amount of new debt. Another $984 million is part of a new authorization to repurchase common shares, which could potentially reduce the outstanding share count by over 50 million shares. This would result in common shareholders receiving a larger portion of per share earnings.

The article Fifth Third Bancorp Investors Could See a Higher Dividend originally appeared on Fool.com and is written by Robert Eberhard.

Fool contributor Robert Eberhard has no position in any stocks mentioned. The Motley Fool owns shares of Fifth Third Bancorp.

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