Citizens Financial Group (NYSE:CFG) Is Paying Out A Dividend Of $0.42

The board of Citizens Financial Group, Inc. (NYSE:CFG) has announced that it will pay a dividend on the 14th of February, with investors receiving $0.42 per share. Based on this payment, the dividend yield will be 3.5%, which is fairly typical for the industry.

See our latest analysis for Citizens Financial Group

Citizens Financial Group's Dividend Forecasted To Be Well Covered By Earnings

We like a dividend to be consistent over the long term, so checking whether it is sustainable is important.

Citizens Financial Group has established itself as a dividend paying company with over 10 years history of distributing earnings to shareholders. Taking data from its last earnings report, calculating for the company's payout ratio shows 66%, which means that Citizens Financial Group would be able to pay its last dividend without pressure on the balance sheet.

Looking forward, EPS is forecast to rise by 145.5% over the next 3 years. Analysts forecast the future payout ratio could be 30% over the same time horizon, which is a number we think the company can maintain.

Citizens Financial Group Has A Solid Track Record

The company has an extended history of paying stable dividends. Since 2015, the dividend has gone from $0.40 total annually to $1.68. This means that it has been growing its distributions at 15% per annum over that time. Rapidly growing dividends for a long time is a very valuable feature for an income stock.

Dividend Growth Is Doubtful

Investors who have held shares in the company for the past few years will be happy with the dividend income they have received. Unfortunately things aren't as good as they seem. Citizens Financial Group has seen earnings per share falling at 7.0% per year over the last five years. If earnings continue declining, the company may have to make the difficult choice of reducing the dividend or even stopping it completely - the opposite of dividend growth. Earnings are forecast to grow over the next 12 months and if that happens we could still be a little bit cautious until it becomes a pattern.

Our Thoughts On Citizens Financial Group's Dividend

Overall, a consistent dividend is a good thing, and we think that Citizens Financial Group has the ability to continue this into the future. While the payments look sustainable for now, earnings have been shrinking so the dividend could come under pressure in the future. The dividend looks okay, but there have been some issues in the past, so we would be a little bit cautious.

Investors generally tend to favour companies with a consistent, stable dividend policy as opposed to those operating an irregular one. However, there are other things to consider for investors when analysing stock performance. For example, we've picked out 1 warning sign for Citizens Financial Group that investors should know about before committing capital to this stock. Looking for more high-yielding dividend ideas? Try our collection of strong dividend payers.

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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.