Fifth Third Bancorp (FITB)

propertiusthesec (< 20) Submitted: 5/27/08 5:14 PM : Start Price: $19.30 FITB Score: -7.86

Every time this stock lifts its head out of the mire, a broker with a putative short position slams it. Deutsche Bank, UBS, and Citicorp are prime examples. Yet Fifth Third was mentioned as a possible buyer of National City. Chairman Kabat expressed confidence in the safety of the dividend, which yields around 9%, at the April 22 annual meeting. The bank benefited from Visa's IPO and issued bonds underwritten by four top investment banks. Is it borrowing to pay the dividend? No, earnings cover it, and it has been increased at least once every year within memory, including this year. By long-standing policy, Ithe bank has NO exposure to subprime loans. Yes, its northern Ohio, southern Michigan, and Florida markets are currently soft, but its emphasis on acquiring banks/branches in Atlanta and other southern localities should pay handsome dividends. Yes, it is suing Citicorp to recover some losses from insurance policies and bond funds that it bought from that institution. I estimate that about half of its related losses will be recouped this year. Recently, the CEO and an EVP each bought 10,000 shares in the mid-twenties -- not the lowest price, to be sure, but clearly not in expectation of a dividend reduction. Full disclosure: I own a lot of it, mostly through inheritance, since I couldn't convince my mother to sell at $69.50-plus around six years ago. Her friend Florence, still iiving, said she would never sell, and against such an edict what does a son with forty years in the investment profession know?

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