Cullen/Frost Bankers, Inc. (CFR.PB) stock analysis

P/E above its 5-year median

Cullen/Frost Bankers's P/E of 14.6 is above its own 5-year median of 14.1.

P/E above the industry

Cullen/Frost Bankers's P/E of 14.6 is above the Commercial Banks median of 12.3.

P/S above the industry

Cullen/Frost Bankers's price-to-sales of 4.19 is above the Commercial Banks median of 3.64.

P/B above the industry

Cullen/Frost Bankers's price-to-book of 2.46 is above the Commercial Banks median of 1.27.

Trading above fair value

The share price of $157.60 is above our fair value estimate of $123.68.

Margin of safety under 20%

The price is 27.4% above fair value, so there is no margin of safety.

Revenue growing under 10% a year

Revenue grew 9.6% a year over the last three fiscal years, short of the 10% we look for.

EPS growing under 10% a year

Diluted EPS grew 4.0% a year over the last three fiscal years.

Earnings growth not accelerating

Net income grew 8.2% over the last twelve months, against a 5-year average of 14.4% a year.

Growing slower than the industry

Revenue grew 6.6% 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 16.3% over the last twelve months and averaged 14.7% over five years; we look for 15% on both.

Return on assets over 1%

Return on assets was 1.3%; for a bank or insurer, 1% or more is considered good.

Return on equity above the industry

Cullen/Frost Bankers's return on equity of 16.3% is above the Commercial Banks median of 11.2%.

Earnings grew over 5 years

Net income grew 14.4% a year on average over the last five fiscal years.

Net margin below its 5-year average

Net margin was 29.5% over the last twelve months, against a 5-year average of 30.8%.

Net margin below the industry

Cullen/Frost Bankers's net margin of 29.5% is below the Commercial Banks median of 30.0%.

Thin capital

Equity is 7.3% of total assets; 8% or more is a comfortable cushion.

Loans funded by deposits

Loans equal 52.8% of deposits, so lending is funded by customer deposits.

Adequate loan-loss reserve

The allowance for credit losses is 1.2% of loans; we look for at least 1%.

High cost base

Non-interest expense takes 63.2% of revenue; under 60% is efficient for a bank.

Deposits growing

Deposits grew 4.0% over the past year.

Borrowings

Needs debt and equity figures.

Pays a dividend

Cullen/Frost Bankers paid dividends worth 2.6% of the share price over the last twelve months.

Yield below Treasuries

The 2.6% 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; Cullen/Frost Bankers yields 2.6%.

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 37.4% of net income.

Covered by free cash flow

Dividends take 44.6% of free cash flow.