Citizens Financial Group Inc's Dividend Analysis
An In-depth Examination of CFG's Dividend Performance and Sustainability
Citizens Financial Group Inc (NYSE:CFG) recently announced a dividend of $0.42 per share, payable on 2023-11-15, with the ex-dividend date set for 2023-10-31. As investors look forward to this upcoming payment, the spotlight also shines on the company's dividend history, yield, and growth rates. Using the data from GuruFocus, let's delve into Citizens Financial Group Inc's dividend performance and evaluate its sustainability.
What Does Citizens Financial Group Inc Do?
This Powerful Chart Made Peter Lynch 29% A Year For 13 Years
How to calculate the intrinsic value of a stock?
Citizens Financial Group Inc is a bank holding company based in Providence, Rhode Island. The company operates through two main business segments: consumer banking and commercial banking. Offering a variety of retail and commercial products, including capital markets and wealth options, Citizens has over 1,000 branches across 14 states, primarily concentrated in the Northeast. The bank boasts over $220 billion in total assets.
A Glimpse at Citizens Financial Group Inc's Dividend History
Since 2014, Citizens Financial Group Inc has maintained a consistent dividend payment record, distributing dividends on a quarterly basis. The chart below provides a historical perspective of the annual Dividends Per Share.
Breaking Down Citizens Financial Group Inc's Dividend Yield and Growth
As of today, Citizens Financial Group Inc has a 12-month trailing dividend yield and a 12-month forward dividend yield of 7.35%, indicating an expectation of consistent dividend payments over the next year.
Over the past three years, Citizens Financial Group Inc's annual dividend growth rate was 6.00%. This rate increased to 19.30% per year over a five-year horizon. Based on the company's dividend yield and five-year growth rate, the 5-year yield on cost of Citizens Financial Group Inc stock as of today is approximately 17.76%.
The Sustainability Question: Payout Ratio and Profitability
To determine the sustainability of the dividend, it's essential to consider the company's payout ratio. The dividend payout ratio reveals the proportion of earnings the company distributes as dividends. A lower ratio implies that the company retains a significant portion of its earnings, thereby ensuring funds for future growth and unexpected downturns. As of 2023-09-30, Citizens Financial Group Inc's dividend payout ratio is 0.42.
Furthermore, Citizens Financial Group Inc's profitability rank provides insight into the company's earnings prowess relative to its peers. As of 2023-09-30, Citizens Financial Group Inc's profitability is ranked 5 out of 10, suggesting fair profitability. The company has reported net profit in 9 out of the past 10 years.
Growth Metrics: The Future Outlook
For a company to sustain dividends, robust growth metrics are crucial. Citizens Financial Group Inc's growth rank of 5 out of 10 suggests a fair growth outlook. The company's revenue per share and 3-year revenue growth rate indicate a strong revenue model, with an average annual increase of approximately 5.40%. However, this rate underperforms approximately 54.64% of global competitors.
The company's 3-year EPS growth rate showcases its capability to grow its earnings, a critical component for sustaining dividends in the long run. Over the past three years, Citizens Financial Group Inc's earnings increased by approximately 2.50% per year on average, a rate that underperforms approximately 70.51% of global competitors. Furthermore, the company's 5-year EBITDA growth rate stands at 5.20%, underperforming approximately 61.67% of global competitors.
Concluding Thoughts
In conclusion, while Citizens Financial Group Inc has demonstrated a consistent dividend payment record and fair profitability, its growth metrics and dividend payout ratio suggest a need for close monitoring. The company's future dividend sustainability will hinge on its ability to improve its growth rates and maintain a healthy payout ratio. As always, potential investors are advised to conduct thorough research and consider multiple factors before making investment decisions.
GuruFocus Premium users can screen for high-dividend yield stocks using the High Dividend Yield Screener.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
This article first appeared on GuruFocus.
