Head-To-Head Analysis: Credicorp (NYSE:BAP) & Fifth Third Bancorp (NASDAQ:FITB)

Credicorp (NYSE:BAP) and Fifth Third Bancorp (NASDAQ:FITB) are both large-cap finance companies, but which is the superior investment? We will contrast the two companies based on the strength of their valuation, profitability, risk, institutional ownership, earnings, dividends and analyst recommendations.

Earnings and Valuation

This table compares Credicorp and Fifth Third Bancorp”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Credicorp	$8.01 billion	4.51	$1.94 billion	$26.99	14.18
Fifth Third Bancorp	$10.47 billion	4.77	$2.52 billion	$2.93	18.78

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Credicorp	25.04%	20.52%	2.87%
Fifth Third Bancorp	15.89%	12.39%	1.20%

Dividends

Credicorp pays an annual dividend of $14.48 per share and has a dividend yield of 3.8%. Fifth Third Bancorp pays an annual dividend of $1.60 per share and has a dividend yield of 2.9%. Credicorp pays out 53.6% of its earnings in the form of a dividend. Fifth Third Bancorp pays out 54.6% 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. Credicorp has raised its dividend for 3 consecutive years and Fifth Third Bancorp has raised its dividend for 14 consecutive years. Credicorp is clearly the better dividend stock, given its higher yield and lower payout ratio.

Institutional & Insider Ownership

89.8% of Credicorp shares are owned by institutional investors. Comparatively, 83.8% of Fifth Third Bancorp shares are owned by institutional investors. 15.9% of Credicorp shares are owned by company insiders. Comparatively, 0.5% of Fifth Third Bancorp shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Volatility and Risk

Credicorp has a beta of 0.88, suggesting that its share price is 12% 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.

Analyst Recommendations

This is a summary of current ratings and target prices for Credicorp and Fifth Third Bancorp, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Credicorp	0	3	4	0	2.57
Fifth Third Bancorp	0	5	17	1	2.83

Credicorp presently has a consensus target price of $418.40, suggesting a potential upside of 9.32%. Fifth Third Bancorp has a consensus target price of $60.54, suggesting a potential upside of 10.02%. Given Fifth Third Bancorp’s stronger consensus rating and higher probable upside, analysts clearly believe Fifth Third Bancorp is more favorable than Credicorp.

Summary

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

About Credicorp

Credicorp Ltd. provides various financial, insurance, and health services and products primarily in Peru and internationally. It operates through Universal Banking, Insurance and Pensions, Microfinance, and Investment Banking and Equity Management segments. The Universal Banking segment grants various credits and financial instruments to individuals and legal entities; and various deposits and current accounts. The Insurance and Pensions segment issues insurance policies to cover losses in commercial property, transport, marine vessels, automobiles, life, health, and pensions; and management services for private pension funds. The Microfinance segment provides management of loans, deposits, and current accounts for small and microenterprises. The Investment Banking and Equity Management segment is involved in provision of brokerage and investment management services for corporations, institutional investors, governments, and foundations; structuring and placement of issues in the primary market; execution and negotiation of transactions in the secondary market; and structuring of securitization processes for corporate customers and manages mutual funds. The company was founded in 1889 and is headquartered in Lima, Peru.

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.