Citizens Financial Group Inc (CFG.PI) stock analysis

P/E above its 5-year median

Citizens Financial's P/E of 13.8 is above its own 5-year median of 11.3.

P/E above the industry

Citizens Financial's P/E of 13.8 is above the Commercial Banks median of 12.3.

P/S below the industry

Citizens Financial's price-to-sales of 3.08 is below the Commercial Banks median of 3.64.

P/B below the industry

Citizens Financial's price-to-book of 1.03 is below the Commercial Banks median of 1.27.

Trading above fair value

The share price of $63.81 is above our fair value estimate of $59.20.

Margin of safety under 20%

The price is 7.8% above fair value, so there is no margin of safety.

Revenue growing under 10% a year

Revenue grew 0.9% a year over the last three fiscal years, short of the 10% we look for.

EPS growing under 10% a year

Diluted EPS grew -2.0% a year over the last three fiscal years.

Earnings growth accelerating

Net income grew 33.5% over the last twelve months, against a 5-year average of 11.6% a year.

Growing slower than the industry

Revenue grew 11.0% over the last twelve months; the Commercial Banks median is 11.4%.

Company guidance

No outlook found in earnings releases from the last twelve months.

Gross margin trend

Banks and insurers do not report gross profit.

Return on equity under 15%

Return on equity was 8.3% over the last twelve months and averaged 7.8% over five years; we look for 15% on both.

Return on assets under 1%

Return on assets was 0.9%; for a bank or insurer, 1% or more is considered good.

Return on equity below the industry

Citizens Financial's return on equity of 8.3% is below the Commercial Banks median of 11.2%.

Earnings grew over 5 years

Net income grew 11.6% a year on average over the last five fiscal years.

Net margin above its 5-year average

Net margin was 24.4% over the last twelve months, against a 5-year average of 24.4%.

Net margin below the industry

Citizens Financial's net margin of 24.4% is below the Commercial Banks median of 30.0%.

Well capitalized

Equity is 11.2% of total assets; 8% or more is a comfortable cushion.

Loans funded by deposits

Loans equal 78.4% of deposits, so lending is funded by customer deposits.

Adequate loan-loss reserve

The allowance for credit losses is 1.4% of loans; we look for at least 1%.

High cost base

Non-interest expense takes 62.5% of revenue; under 60% is efficient for a bank.

Deposits growing

Deposits grew 6.0% over the past year.

Modest borrowings

Borrowings other than deposits are 4.4% of equity.

Pays a dividend

Citizens Financial paid dividends worth 2.2% of the share price over the last twelve months.

Yield below Treasuries

The 2.2% yield is below the 4.4% on a 1-year Treasury.

Yield below the top quarter

The top quarter of US dividend payers yield 4.0% or more; Citizens Financial yields 2.2%.

Dividend not cut

The dividend per share has not fallen by more than 10% in any of the last 10 fiscal years.

Covered by earnings

Dividends take 36.7% of net income.

Cash-flow cover

Needs dividends paid and free cash flow.