| Snowflake Score | |
|---|---|
| Valuation | 3/6 |
| Future Growth | 1/6 |
| Past Performance | 2/6 |
| Financial Health | 6/6 |
| Dividends | 4/6 |
CFG Stock Overview
Citizens Financial Group, Inc. operates as the bank holding company for Citizens Bank, National Association that provides retail and commercial banking products and services to individuals, small businesses, middle-market companies, corporations, and institutions in the United States.
Citizens Financial Group Competitors
Price History & Performance
| Historical stock prices | |
|---|---|
| Current Share Price | US$39.91 |
| 52 Week High | US$57.00 |
| 52 Week Low | US$34.35 |
| Beta | 1.39 |
| 1 Month Change | 12.80% |
| 3 Month Change | 5.19% |
| 1 Year Change | -10.86% |
| 3 Year Change | 23.18% |
| 5 Year Change | 20.72% |
| Change since IPO | 72.92% |
Recent News & Updates
Citizens Financial Group: Healthy Dividend, Healthy Company
Solid top-line revenue growth has driven CFG's performance over the past several years. Excellent expense management has led to healthy profit margins. Strong balance sheet and cash flow enable an above-average dividend payment. Economic headwinds may make some investors slightly cautious. It should come as no surprise that one of the largest regional banks in the country is also one of the oldest. Founded as High Street Bank in 1828 in Providence, Rhode Island, today’s Citizens Financial Group (CFG) has over $226 billion in assets and $179 billion in deposits, 1,200 branches and 3,300 ATMs with locations in 14 states. From its early days, the company grew steadily, facing much hardship during the Great Depression and World War II years. By the early 1980s, the bank surpassed $1.0 billion in assets. Later that decade, CFG became a wholly owned subsidiary of the RBS Group. Growth really began to take off following the acquisition by RBS, with the bank making many acquisitions during the great banking consolidation of the 1990s. Following the Global Financial Crisis, RBS needed to divest its U.S. assets, and Citizens Financial became a standalone, publicly traded company in 2015. While Providence will always be home for CFG, recent acquisitions have expanded the company’s footprint into the competitive New York City metropolitan area. Like many companies that have a long, successful history through various economic cycles, Citizens Financial Group is a strong performer that should be able to manage the current economic backdrop to emerge even stronger. Income Statement Beginning with net interest income in 2021, interest income actually decreased 9.4%, but interest expense decreased 56%. As a result, net interest income was down about 2% from 2020, mostly due to the lower interest rates and a difficult yield curve environment throughout the year. However, through the first half of 2022, net interest income increased 18% from the first half of 2021, mainly due to higher interest-earning assets and higher net interest margin. Management noted in the Q2 MD&A that the average interest-earning asset yields increased 15 basis points compared to a 4-basis point decrease on the average interest-bearing liabilities. The company did acquire HSBC’s East Coast Branches in February of this year, and CFG also acquired Investors Bancorp in April; these acquisitions have resulted in higher reported loans and net interest income this year, compared to the first half of 2021. The company has also seen a decline in noninterest revenues when comparing 2021 to 2020. Noninterest revenues declined about 8% compared to the full year 2020. The decline was mainly due to a 53% decrease in the company’s mortgage banking fees due to increased competition in the mortgage space. This decline in mortgage banking continued through the first half of 2022, with mortgage revenues declining 44% compared to the first half of 2021 because of lower margins and production volumes. Total noninterest revenues declined 3% in the first half of 2022 when compared to the first half of 2021. Revenues are a bit of a concern for Citizens Financial as the mortgage business is becoming a drag on total net revenues. The rest of the revenues look good, but because the mortgage business is such a large component of noninterest revenues, the whole number is showing a decline. It is also worth noting that the mortgage banking fees have averaged 5.8% of total net revenues over the past five years. For the first half of 2022, mortgage banking fees were 3.9% of total net revenues. CFG Revenue (Annual) data by YCharts The activity surrounding the provision for credit losses is interesting. For the full year 2021, the company reported a benefit of $411 million, the first benefit from loan losses since at least 2012. At the time, the company said the benefit was due to “strong credit performance and an improving macroeconomic outlook.” However, in the company’s Q2 10-Q, management reported that the macroeconomic environment had deteriorated slightly, resulting in a provision for loan losses of $219 million, most of which was reported in Q2. Also, the Q2 provision includes some cleanup of provisions from the two acquisitions this year. Excluding those, the company would still have reported a provision for the six months, albeit much smaller. The comment about the deterioration is telling, though, as the macroeconomic environment is becoming more challenging in the face of higher inflation, higher interest rates and continued supply chain impacts. On the expense side, the company has historically done a fine job managing expenses. Compensation is the largest expense category for financial firms. At CFG, the compensation expense ratio has averaged 0.31 over the past five years, with 2021 coming in at 0.32, a tick higher than average. Through the first half of 2022, the ratio is 0.35, which is quite a bit higher than the historical average. The efficiency ratio, a measure of overall expenses, has averaged 0.60 over the past five years, with 2021 finishing at 0.61. The increase in overall expenses was mainly due to higher equipment and software as the company continues to invest in its technology infrastructure. Outside services similarly increased based on ongoing growth initiatives. Through the first six months of this year, the efficiency ratio was 0.66, which is quite a bit higher than the past. The increases were across all reported categories and include integration-related expenses. This is an area that investors really need to watch. The company hasn’t seen efficiency ratio numbers of this level since 2015. I would expect management to keep these numbers in check over the second half of 2022, particularly with some top line revenue challenges. The bottom-line net income numbers have been really strong for CFG. Operating margins have averaged 33% over the past five years, with 2021 coming in at 45%. But keep in mind the loan loss benefit discussed above. Operating margin for the first half of 2022 was 28%, which is good, but well below the pre-pandemic level of 35% in 2019. Five-year net income for common stockholders has increased at 16.4% annually, with EPS increasing at a very strong 21% annually over the same period. In the first half of 2022, net income decreased to 40% to $728 million, while EPS decreased 44% to $1.58 per share. The company has been very aggressive by repurchasing almost 100 million shares, or nearly 20% of outstanding shares, over the past five years. The company is currently authorized to repurchase up to $1 billion worth of outstanding shares under its current authorization. CFG Net Income (Annual) data by YCharts Balance Sheet Looking at the balance sheet, total assets have increased 4.7% annually over the five-year period ending in 2021. Through the first half of 2022, total assets increased 20%, primarily due to the acquisitions earlier this year. More specifically, commercial loans increased 35% while retail loans increased 10%. Total liabilities have outpaced asset growth, with a 4.9% annual growth rate over the five-year period. Deposit growth has been strong, at 7% annually over this period. The trend continued in the first half of 2022 as total liabilities increased 23%, with deposits increasing 16% since the end of 2021. First half deposit growth excluding the acquisitions was a more modest 2%. Notably, long-term debt has decreased over 11% annually over the past five years. With the acquisitions earlier in 2022, however, borrowings have increased to $14.4 billion, primarily due to FHLB advances. Actual long-term debt, though, has declined from year end 2021. Finally, equity has increased 3.5% annually, primarily driven by an increased reliance on preferred stock as a source of capital. Additionally, common equity and tangible common equity have both increased 1.9% and 2.5%, respectively, over the past five years. CFG Total Assets (Annual) data by YCharts Ratios Return on equity was steady in the 8.3% range prior to the 2020 pandemic. After falling by about half in 2020, ROE rebounded to 10.1% in 2021. At the end of Q2, ROE was 8.6%, which is more in line with the historical average. Return on common equity has followed the same trend, declining from a peak of 13.5% in 2018 to 8.3% in 2021. At the end of Q2, ROCE was 6.1%, which is quite a bit lower than historical averages. Debt to equity has steadily decreased, from a high of 0.87 in 2016 to just 0.30 at the end of 2021. Similarly, debt to total assets has decreased from 0.11 in 2018 to 0.04 in 2021. Interest coverage ratios are strong, with 2021 reporting a 9.8x interest figure. First half 2022 interest coverage was a very healthy 6.4x. Credit Quality In terms of credit quality, the company maintains excellent credit. Net charge offs in 2021 were just 0.26% of loans. The allowance for loan losses did tick up slightly from the end of 2021 to the end of Q2. This metric does bear scrutiny as it has increased a fair amount from where it was three or four years ago. Stock Performance and Valuation CFG is a good, quality regional bank. Like many stocks this year, CFG is down. CFG data by YCharts At a recent price of $37.21, the stock is trading at 9.4x last twelve months earnings with a 0.8x book value ratio. Both of these valuation figures are below the stock’s five-year averages, possibly reflecting lower revenue growth, higher expenses over the past six months and a declining economic backdrop. Compared to several of its peers, CFG has a below average P/E ratio. CFG PE Ratio data by YCharts Additionally, the company's P/B ratio is also below the peer average: CFG Price to Book Value data by YCharts Using a variety of valuation methods, the fair value for this stock is about $40, so the stock is currently slightly underpriced. It does provide an above average yield of 4.27%, compared to the peer average of 3.77%.
Citizens Financial acquires Paladin Advisors, expands wealth management business
Citizens Financial (NYSE:CFG) announced a definitive agreement to purchase select assets and liabilities of Paladin Advisors, an independent, registered investment advisor headquartered in Kensington, New Hampshire. The acquisitions brings additional investment capabilities to the Clarfeld | Citizens Private Wealth team. The transaction is expected to close in Q3 of 2022 wherein Paladin Advisors will become part of Clarfeld | Citizens Private Wealth.
Shareholder Returns
| CFG | US Banks | US Market | |
|---|---|---|---|
| 7D | 7.3% | 5.3% | 3.2% |
| 1Y | -10.9% | -10.9% | -10.1% |
Return vs Industry: CFG exceeded the US Banks industry which returned -13.2% over the past year.
Return vs Market: CFG matched the US Market which returned -11.7% over the past year.
Price Volatility
| CFG volatility | |
|---|---|
| CFG Average Weekly Movement | 5.0% |
| Banks Industry Average Movement | 3.7% |
| Market Average Movement | 7.7% |
| 10% most volatile stocks in US Market | 16.9% |
| 10% least volatile stocks in US Market | 3.2% |
Stable Share Price: CFG is not significantly more volatile than the rest of US stocks over the past 3 months, typically moving +/- 5% a week.
Volatility Over Time: CFG's weekly volatility (5%) has been stable over the past year.
About the Company
| Founded | Employees | CEO | Website |
|---|---|---|---|
| 1828 | 17,463 | Bruce Van Saun | https://www.citizensbank.com |
Citizens Financial Group, Inc. operates as the bank holding company for Citizens Bank, National Association that provides retail and commercial banking products and services to individuals, small businesses, middle-market companies, corporations, and institutions in the United States. The company operates in two segments, Consumer Banking and Commercial Banking. The Consumer Banking segment offers deposit products, mortgage and home equity lending products, credit cards, business loans, wealth management, and investment services; and auto, education, and point-of-sale finance loans, as well as digital deposit products.
Citizens Financial Group Fundamentals Summary
| CFG fundamental statistics | |
|---|---|
| Market Cap | US$19.78b |
| Earnings (TTM) | US$1.73b |
| Revenue (TTM) | US$7.04b |
11.4x
P/E Ratio0.9x
P/B RatioIs CFG overvalued?
See Fair Value and valuation analysisEarnings & Revenue
| CFG income statement (TTM) | |
|---|---|
| Revenue | US$7.04b |
| Cost of Revenue | US$0 |
| Gross Profit | US$7.04b |
| Other Expenses | US$5.31b |
| Earnings | US$1.73b |
Last Reported Earnings
Jun 30, 2022
Next Earnings Date
Oct 19, 2022
| Earnings per share (EPS) | 3.49 |
| Gross Margin | 100.00% |
| Net Profit Margin | 24.58% |
| Debt/Equity Ratio | 79.0% |
How did CFG perform over the long term?
See historical performance and comparisonDividends
4.2%
Current Dividend Yield40%
Payout RatioValuation
Is CFG undervalued compared to its fair value, analyst forecasts and its price relative to the market?
Valuation Score
3/6Valuation Score 3/6
Price-To-Earnings vs Peers
Price-To-Earnings vs Industry
Price-To-Earnings vs Fair Ratio
Below Fair Value
Significantly Below Fair Value
Analyst Forecast
Key Valuation Metric
Which metric is best to use when looking at relative valuation for CFG?
Other financial metrics that can be useful for relative valuation.
| What is CFG's n/a Ratio? | |
|---|---|
| n/a Ratio | 0x |
| n/a | n/a |
| Market Cap | US$19.78b |
| Key Statistics | |
|---|---|
| Enterprise Value/Revenue | n/a |
| Enterprise Value/EBITDA | n/a |
| PEG Ratio | 1.3x |
Price to Earnings Ratio vs Peers
How does CFG's PE Ratio compare to its peers?
| CFG PE Ratio vs Peers |
|---|
| Company | PE | Estimated Growth | Market Cap |
|---|---|---|---|
| Peer Average | 10.6x | ||
KEY KeyCorp | 8.5x | 3.4% | US$18.1b |
RF Regions Financial | 10.1x | 1.7% | US$21.5b |
HBAN Huntington Bancshares | 12.5x | 2.2% | US$20.7b |
FITB Fifth Third Bancorp | 11.2x | 6.2% | US$25.7b |
CFG Citizens Financial Group | 11.4x | 8.8% | US$19.8b |
Price-To-Earnings vs Peers: CFG is expensive based on its Price-To-Earnings Ratio (11.4x) compared to the peer average (10.6x).
Price to Earnings Ratio vs Industry
How does CFG's PE Ratio compare vs other companies in the US Banks Industry?
Price-To-Earnings vs Industry: CFG is expensive based on its Price-To-Earnings Ratio (11.4x) compared to the US Banks industry average (10x)
Price to Earnings Ratio vs Fair Ratio
What is CFG's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.
| Fair Ratio | |
|---|---|
| Current PE Ratio | 11.4x |
| Fair PE Ratio | 14.8x |
Price-To-Earnings vs Fair Ratio: CFG is good value based on its Price-To-Earnings Ratio (11.4x) compared to the estimated Fair Price-To-Earnings Ratio (14.8x).
Share Price vs Fair Value
What is the Fair Price of CFG when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.
Below Fair Value: CFG ($39.91) is trading below our estimate of fair value ($88.28)
Significantly Below Fair Value: CFG is trading below fair value by more than 20%.
Analyst Price Targets
What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?
Analyst Forecast: Target price is less than 20% higher than the current share price.
Discover undervalued companies
Future Growth
How is Citizens Financial Group forecast to perform in the next 1 to 3 years based on estimates from 15 analysts?
Future Growth Score
1/6Future Growth Score 1/6
Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Future ROE
8.8%
Forecasted annual earnings growth
Earnings and Revenue Growth Forecasts
Analyst Future Growth Forecasts
Earnings vs Savings Rate: CFG's forecast earnings growth (8.8% per year) is above the savings rate (1.9%).
Earnings vs Market: CFG's earnings (8.8% per year) are forecast to grow slower than the US market (14.4% per year).
High Growth Earnings: CFG's earnings are forecast to grow, but not significantly.
Revenue vs Market: CFG's revenue (6.6% per year) is forecast to grow slower than the US market (7.9% per year).
High Growth Revenue: CFG's revenue (6.6% per year) is forecast to grow slower than 20% per year.
Earnings per Share Growth Forecasts
Future Return on Equity
Future ROE: CFG's Return on Equity is forecast to be low in 3 years time (9.6%).
Discover growth companies
Past Performance
How has Citizens Financial Group performed over the past 5 years?
Past Performance Score
2/6Past Performance Score 2/6
Quality Earnings
Growing Profit Margin
Earnings Trend
Accelerating Growth
Earnings vs Industry
High ROE
3.6%
Historical annual earnings growth
Earnings and Revenue History
Quality Earnings: CFG has high quality earnings.
Growing Profit Margin: CFG's current net profit margins (24.6%) are lower than last year (29.2%).
Past Earnings Growth Analysis
Earnings Trend: CFG's earnings have grown by 3.6% per year over the past 5 years.
Accelerating Growth: CFG's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.
Earnings vs Industry: CFG had negative earnings growth (-9.8%) over the past year, making it difficult to compare to the Banks industry average (9.2%).
Return on Equity
High ROE: CFG's Return on Equity (7.6%) is considered low.
Discover strong past performing companies
Financial Health
How is Citizens Financial Group's financial position? (This company is analysed differently as a bank or financial institution)
Financial Health Score
6/6Financial Health Score 6/6
Asset Level
Allowance for Bad Loans
Low Risk Liabilities
Loan Level
Low Risk Deposits
Level of Bad Loans
Financial Position Analysis
Debt to Equity History and Analysis
Balance Sheet
Financial Institutions Analysis
Asset Level: CFG's Assets to Equity ratio (9.3x) is low.
Allowance for Bad Loans: CFG has a sufficient allowance for bad loans (234%).
Low Risk Liabilities: 88% of CFG's liabilities are made up of primarily low risk sources of funding.
Loan Level: CFG has an appropriate level of Loans to Assets ratio (68%).
Low Risk Deposits: CFG's Loans to Deposits ratio (86%) is appropriate.
Level of Bad Loans: CFG has an appropriate level of bad loans (0.5%).
Discover healthy companies
Dividend
What is Citizens Financial Group current dividend yield, its reliability and sustainability?
Dividend Score
4/6Dividend Score 4/6
Notable Dividend
High Dividend
Stable Dividend
Growing Dividend
Earnings Coverage
Future Dividend Coverage
4.21%
Current Dividend Yield
Dividend Yield vs Market
Notable Dividend: CFG's dividend (4.21%) is higher than the bottom 25% of dividend payers in the US market (1.49%).
High Dividend: CFG's dividend (4.21%) is in the top 25% of dividend payers in the US market (4%)
Stability and Growth of Payments
Stable Dividend: Whilst dividend payments have been stable, CFG has been paying a dividend for less than 10 years.
Growing Dividend: CFG's dividend payments have increased, but the company has only paid a dividend for 8 years.
Current Payout to Shareholders
Earnings Coverage: With its reasonably low payout ratio (39.8%), CFG's dividend payments are well covered by earnings.
Future Payout to Shareholders
Future Dividend Coverage: CFG's dividends in 3 years are forecast to be well covered by earnings (35.2% payout ratio).
Discover strong dividend paying companies
Management
How experienced are the management team and are they aligned to shareholders interests?
4.1yrs
Average management tenure
CEO
Bruce Van Saun (65 yo)
8.83yrs
Tenure
US$12,430,076
Compensation
Mr. Bruce Winfield Van Saun has been an Independent Director of Moody’s Corporation since March 1, 2016. He has been the Chairman and Chief Executive Officer of Citizens Financial Group, Inc. since October...
CEO Compensation Analysis
Compensation vs Market: Bruce's total compensation ($USD12.43M) is about average for companies of similar size in the US market ($USD12.88M).
Compensation vs Earnings: Bruce's compensation has been consistent with company performance over the past year.
Leadership Team
Experienced Management: CFG's management team is considered experienced (4.1 years average tenure).
Board Members
Experienced Board: CFG's board of directors are considered experienced (5.2 years average tenure).
Ownership
Who are the major shareholders and have insiders been buying or selling?
Insider Trading Volume
Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.
Recent Insider Transactions
Ownership Breakdown
Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 16.3%.
Top Shareholders
Company Information
Citizens Financial Group, Inc.'s employee growth, exchange listings and data sources
Key Information
- Name: Citizens Financial Group, Inc.
- Ticker: CFG
- Exchange: NYSE
- Founded: 1828
- Industry: Regional Banks
- Sector: Banks
- Implied Market Cap: US$19.781b
- Shares outstanding: 495.64m
- Website: https://www.citizensbank.com
Number of Employees
Location
- Citizens Financial Group, Inc.
- One Citizens Plaza
- Providence
- Rhode Island
- 2903
- United States
Listings
Company Analysis and Financial Data Status
| Data | Last Updated (UTC time) |
|---|---|
| Company Analysis | 2022/08/12 00:00 |
| End of Day Share Price | 2022/08/12 00:00 |
| Earnings | 2022/06/30 |
| Annual Earnings | 2021/12/31 |
Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.