Fifth Third Bancorp (FITB): A Top Regional Bank Dividend Stock

Fifth Third Bancorp (FITB) has emerged as a standout in the regional banking sector, particularly for investors seeking reliable dividend income. With a dividend yield of 4.12%, significantly higher than the sector average of 1.49%, FITB offers a compelling case for inclusion in any dividend-focused portfolio. But what makes FITB truly shine is its consistent dividend growth and sustainable payout ratio, which have positioned it as one of the best regional bank dividend stocks to buy.



A Decade of Dividend Growth

Fifth Third Bancorp's dividend growth story is one of consistency and reliability. The company has increased its dividends for over 16 years, a streak that began in 2009. This long-term commitment to returning value to shareholders is a testament to the company's financial stability and operational efficiency. Over the past decade, FITB's dividend per share has steadily increased, from $0.33 in 2022 to $0.37 in 2025. This consistent growth is not just a numbers game; it reflects the company's ability to generate sufficient earnings to support dividend payments while also reinvesting in growth opportunities.

Sustainable Payout Ratio

One of the key metrics that sets FITB apart is its payout ratio, which stands at 46.46%. This means that the company is paying out 46.46% of its earnings as dividends, leaving a significant portion of its earnings for reinvestment. A payout ratio below 60% is generally considered sustainable, and FITB's ratio falls well within this range. This sustainability is further supported by the company's strong earnings performance. For instance, FITB's past year earnings per share was $3.14, and their annual dividend per share is $1.46, resulting in a payout ratio of 46.46% ($1.46/$3.14). This indicates that the company has enough earnings to cover its dividends and still retain earnings for reinvestment in the business.

Factors Contributing to Dividend Sustainability

Several factors have contributed to Fifth Third Bancorp's ability to sustain and increase dividends consistently. Firstly, the company's diversified loan and lease portfolio, which includes commercial and industrial loans, commercial mortgage loans, and consumer loans, provides a stable revenue stream. This diversification helps mitigate risks and ensures a steady flow of income.

Secondly, the company's strong capital management and strategic initiatives have positioned it for growth. Analysts have noted that FITB's capital management practices and strategic initiatives are robust, providing a solid foundation for future dividend increases. For example, David Chiaverini from Wedbush reiterated a Buy rating on Fifth Third Bancorp, citing strong capital management and strategic initiatives as reasons for the positive outlook.

Additionally, the company's consistent earnings performance further supports its ability to maintain and increase dividends. The next quarter’s earnings estimate for FITB is $0.70, with a range of $0.65 to $0.77. This estimate, combined with the company's historical earnings performance, indicates that FITB is well-positioned to continue its dividend growth streak.

Analyst Consensus and Price Targets

The analyst community has taken notice of FITB's strong fundamentals and dividend growth. Based on 14 analysts giving stock ratings to Fifth Third Bancorp in the past three months, the consensus rating is a "Moderate Buy." This rating is supported by a detailed list of analyst forecasts, with price targets ranging from $42.00 to $56.00. The average price target is $48.86, representing a 37.75% upside from the last price of $35.47. This bullish outlook is further supported by the company's strong financial metrics and consistent dividend growth.

Conclusion

Fifth Third Bancorp (FITB) stands out as one of the best regional bank dividend stocks to buy, thanks to its high dividend yield, sustainable payout ratio, and consistent dividend growth. The company's diversified loan portfolio, strong capital management, and strategic initiatives provide a solid foundation for future dividend increases. With a "Moderate Buy" rating from analysts and an average price target of $48.86, FITB is well-positioned to continue delivering value to shareholders. For investors seeking reliable dividend income, Fifth Third Bancorp is a stock worth considering.