Should Citizens Financial Group Inc (NYSE:CFG) Be Part Of Your Portfolio?
A sizeable part of portfolio returns can be produced by dividend stocks due to their contribution to compounding returns in the long run. In the past 4 years Citizens Financial Group Inc (NYSE:CFG) has returned an average of 2.00% per year to investors in the form of dividend payouts. Let’s dig deeper into whether Citizens Financial Group should have a place in your portfolio. View our latest analysis for Citizens Financial Group
Here’s how I find good dividend stocks
If you are a dividend investor, you should always assess these five key metrics:
Is it paying an annual yield above 75% of dividend payers?
Does it consistently pay out dividends without missing a payment of significantly cutting payout?
Has dividend per share amount increased over the past?
Does earnings amply cover its dividend payments?
Will the company be able to keep paying dividend based on the future earnings growth?
How does Citizens Financial Group fare?
The current trailing twelve-month payout ratio for the stock is 20.96%, which means that the dividend is covered by earnings. In the near future, analysts are predicting a higher payout ratio of 32.21%, leading to a dividend yield of 2.80%. Furthermore, EPS should increase to $3.53. The higher payout forecasted, along with higher earnings, should lead to greater dividend income for investors moving forward. If dividend is a key criteria in your investment consideration, then you need to make sure the dividend stock you’re eyeing out is reliable in its payments. Unfortunately, it is really too early to view Citizens Financial Group as a dividend investment. It has only been consistently paying dividends for 4 years, however, standard practice for reliable payers is to look for a 10-year minimum track record. In terms of its peers, Citizens Financial Group generates a yield of 2.18%, which is on the low-side for Banks stocks.
Next Steps:
If you are building an income portfolio, then Citizens Financial Group is a complicated choice since it has some positive aspects as well as negative ones. But if you are not exclusively a dividend investor, the stock could still be an interesting investment opportunity. Given that this is purely a dividend analysis, I urge potential investors to try and get a good understanding of the underlying business and its fundamentals before deciding on an investment. Below, I’ve compiled three pertinent factors you should further examine:
Future Outlook: What are well-informed industry analysts predicting for CFG’s future growth? Take a look at our free research report of analyst consensus for CFG’s outlook.
Valuation: What is CFG worth today? Even if the stock is a cash cow, it’s not worth an infinite price. The intrinsic value infographic in our free research report helps visualize whether CFG is currently mispriced by the market.
Dividend Rockstars: Are there better dividend payers with stronger fundamentals out there? Check out our free list of these great stocks here.
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned.
