Fifth Third Bancorp (FITB) vs Mastercard Incorporated (MA): Which Is the Better Buy in 2026?
As of 2026-11-01, FITB is undervalued at $54, with a DCF intrinsic value of $92 and a margin of safety of 42%. MA is overvalued at $638, with an intrinsic value of $563 and a margin of safety of -13%. Of the two, FITB has the wider margin of safety.
Rewards
- ★Fifth Third Bancorp scores 84/100 on the Economic Moat Score (Wide Moat), with revenue predictability as the strongest competitive dimension.
- ★Mastercard Incorporated has maintained ROIC above 15% for 4 consecutive years, indicating a durable competitive advantage.
- ★Gross margin of 100.0% indicates strong pricing power — typical of businesses with significant intellectual property or brand strength.
- ★Mastercard Incorporated scores 99/100 on the Economic Moat Score (Wide Moat), with roic consistency as the strongest competitive dimension.
Risks
- ⚠Gross margin of 0.0% is low, suggesting a competitive or commodity-like market with limited pricing power.
- ⚠Each dollar of retained earnings has produced only $0.22 of earning power — shareholders may have been better served by dividends.
- ⚠Trailing P/E of 18.1x is 54% above the historical average of 11.7x — the stock trades at a premium to its own history.
- ⚠FCF yield of 3.0% is below 3%, meaning the market is pricing in substantial future growth to justify the current price.
- ⚠High leverage (2.00x net debt/equity) combined with thin interest coverage (-1.0x) poses financial risk.
- ⚠9 insider sales totaling $24.1M with no purchases in the past 3 months — insiders are reducing their exposure.
Key Valuation Metrics
Learn more →Historical Fundamentals
Learn more →Price ÷ Earnings Per Share — how many years of current earnings you're paying for at today's price. Lower P/E may indicate undervaluation. The dashed forward point is the forward P/E — today's price ÷ analyst consensus EPS.
Price ÷ Earnings Per Share — how many years of current earnings you're paying for at today's price. Lower P/E may indicate undervaluation. The dashed forward point is the forward P/E — today's price ÷ analyst consensus EPS.
Price ÷ Earnings Per Share — how many years of current earnings you're paying for at today's price. Lower P/E may indicate undervaluation. The dashed forward point is the forward P/E — today's price ÷ analyst consensus EPS.
$1 Retained Earnings Test
Learn more →> $1 created per $1 retained = Value Creator · < $1 created = Value Destroyer
> $1 created per $1 retained = Value Creator · < $1 created = Value Destroyer
Buffett's "$1 Test": For every $1 of earnings retained, has management created at least $1 of market value?
> $1 created per $1 retained = Value Creator · < $1 created = Value Destroyer
Discounted Cash Flow (DCF) Analysis
Learn more →Reverse DCF — Market-Implied Growth
Learn more →Requires positive FCF to compute implied growth rate.
What growth rate is the market pricing in at $638?
The market implies +16.4% Owner Earnings growth, roughly in line with history — reasonably priced.
Standard FCF implies +15.0%, reflecting ongoing growth investment.
Economic Moat Score
Learn more →Wide moat driven primarily by revenue predictability. Margin Stability is the area most vulnerable to competitive pressure.
Wide moat with strength across all dimensions. ROIC Consistency is the standout factor.
Forensic Accounting
Learn more →M-Score Trend
M-Score Trend
Beneish's 8-variable model estimates the probability of earnings manipulation. An M-Score above -1.78 signals elevated risk — companies in this range have historically been 3-5× more likely to be manipulating earnings. Scores between -2.22 and -1.78 fall in a grey zone warranting further investigation.
Ownership Breakdown
Learn more →High insider ownership aligns management incentives with shareholders. Institutional concentration can indicate smart-money conviction but also crowding risk.
Insider Buying Activity
Learn more →Open market purchases · includes direct & indirect ownership · excludes option exercises.
Insider Selling Activity
Learn more →Direct ownership only · excludes indirect, option exercises, planned (10b5-1) sales & derivatives.
🎭 Mr. Market's Mood
Learn more →"Market is optimistic — be cautious and ensure you have a margin of safety"
"Market is optimistic — be cautious and ensure you have a margin of safety"
Composite sentiment score based on market signals. Inspired by Buffett’s "Mr. Market" allegory — fear = potential opportunity, greed = potential risk. Must be used alongside fundamental analysis, not in isolation.
⚖️ Buffett Signal
Learn more →The Buffett Signal cross-references market sentiment with DCF valuation. Configure the DCF Analysis above to generate a signal.
The Buffett Signal cross-references market sentiment with DCF valuation. Configure the DCF Analysis above to generate a signal.
Frequently Asked Questions: FITB vs MA
Is Fifth Third Bancorp or Mastercard Incorporated more undervalued in 2026?▼
Based on our discounted cash flow model, FITB trades at a 41.7% margin of safety (intrinsic value $92 vs. price $54), compared to MA's -13.3% margin of safety (intrinsic $563 vs. $638).
Which stock has a wider economic moat, Fifth Third Bancorp or Mastercard Incorporated?▼
MA scores 99/100 (Wide moat), while FITB scores 84/100 (Wide moat). The moat score measures competitive advantage durability across ROIC consistency, margin stability, revenue predictability, and reinvestment efficiency.
Is Fifth Third Bancorp in financial distress?▼
FITB's Altman Z-Score of 0.3 places it in the Distress zone, signaling elevated bankruptcy risk. MA scores 10.6 (Safe zone). The Altman Z-Score is a five-factor model that predicts insolvency within two years; scores below 1.81 indicate significant distress.
Which stock has higher return on invested capital, Fifth Third Bancorp or Mastercard Incorporated?▼
MA earns 56.6% ROIC versus FITB's 17.0%. A higher ROIC means the company generates more profit per dollar of capital employed, a hallmark of durable competitive advantage in Buffett-style analysis.
Which dividend is safer, Fifth Third Bancorp's or Mastercard Incorporated's?▼
MA's dividend earns a safety score of 94/100 (Very Safe), compared to FITB's 94/100 (Very Safe). MA has raised its dividend for 3 consecutive years.