Fifth Third Bancorp - stock ticker FITB - is a diversified regional bank holding company that offers a range of financial services and products, such as deposits, lending, transaction processing, and advisory solutions. Now bank stocks are popular - Fifth Third's stock is up almost 60% over the last six months. However, even after this sudden resurgence, the stock still looks attractive. It was pushed down so far, for so long, that there's a lot of coiled spring to unwind here.

And while that spring unwinds, investors can look forward to collecting a market-beating dividend that's growing like clockwork. The company has already increased its dividend for 10 consecutive years. Their five-year dividend growth rate is 15.1%, which handily beats any kind of inflation. That growth comes on top of the stock's yield of 3.2%. This dividend, by the way, is more than twice as high as what the broader market offers. It's also 40 basis points higher than the stock's own five-year average yield. With a payout ratio of 59%, the dividend is easily covered - and that's after using depressed GAAP EPS. Once the bank moves past the pandemic, reserves will be released and the payout ratio will drop as a result of rising EPS.

I love dividend growth stocks in the "sweet spot". The sweet spot is a yield of between 2.5% and 3.5%, paired with a high-single-digit dividend growth rate. This stock is clearly right there. Here's the bottom line, guys: Fifth Third Bancorp is a quality regional bank that has shown an exceptional ability to grow in a challenging environment. And deepening exposure to one of the fastest-growing areas of the United States gives them a bright future. With a market-beating yield, double-digit dividend growth, a moderate payout ratio, and the potential that shares are 9% undervalued, this dividend growth stock is still on sale.

Video Length: 00:11:46