Citizens Financial Group (NYSE:CFG) Has Affirmed Its Dividend Of $0.42

Citizens Financial Group, Inc. (NYSE:CFG) has announced that it will pay a dividend of $0.42 per share on the 14th of August. This means the dividend yield will be fairly typical at 3.5%.

While the dividend yield is important for income investors, it is also important to consider any large share price moves, as this will generally outweigh any gains from distributions. Investors will be pleased to see that Citizens Financial Group's stock price has increased by 36% in the last 3 months, which is good for shareholders and can also explain a decrease in the dividend yield.

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Citizens Financial Group's Payment Expected To Have Solid Earnings Coverage

While it is always good to see a solid dividend yield, we should also consider whether the payment is feasible.

Citizens Financial Group has established itself as a dividend paying company with over 10 years history of distributing earnings to shareholders. Past distributions do not necessarily guarantee future ones, but Citizens Financial Group's payout ratio of 51% is a good sign as this means that earnings decently cover dividends.

Looking forward, EPS is forecast to rise by 87.0% over the next 3 years. Analysts estimate the future payout ratio will be 33% over the same time period, which is in the range that makes us comfortable with the sustainability of the dividend.

Check out our latest analysis for Citizens Financial Group

Citizens Financial Group Has A Solid Track Record

The company has been paying a dividend for a long time, and it has been quite stable which gives us confidence in the future dividend potential. Since 2015, the annual payment back then was $0.40, compared to the most recent full-year payment of $1.68. This implies that the company grew its distributions at a yearly rate of about 15% over that duration. So, dividends have been growing pretty quickly, and even more impressively, they haven't experienced any notable falls during this period.

Citizens Financial Group Could Grow Its Dividend

The company's investors will be pleased to have been receiving dividend income for some time. It's encouraging to see that Citizens Financial Group has been growing its earnings per share at 5.8% a year over the past five years. Shareholders are getting plenty of the earnings returned to them, which combined with strong growth makes this quite appealing.

Citizens Financial Group Looks Like A Great Dividend Stock

Overall, we like to see the dividend staying consistent, and we think Citizens Financial Group might even raise payments in the future. The company is easily earning enough to cover its dividend payments and it is great to see that these earnings are being translated into cash flow. Taking this all into consideration, this looks like it could be a good dividend opportunity.

Market movements attest to how highly valued a consistent dividend policy is compared to one which is more unpredictable. Meanwhile, despite the importance of dividend payments, they are not the only factors our readers should know when assessing a company. Earnings growth generally bodes well for the future value of company dividend payments. See if the 16 Citizens Financial Group analysts we track are forecasting continued growth with our free report on analyst estimates for the company. If you are a dividend investor, you might also want to look at our curated list of high yield dividend stocks.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.