Yahoo Finance Citizens Financial Group (CFG) Could Be a Great Choice
Whether it's through stocks, bonds, ETFs, or other types of securities, all investors love seeing their portfolios score big returns. But for income investors, generating consistent cash flow from each of your liquid investments is your primary focus.
Cash flow can come from bond interest, interest from other types of investments, and of course, dividends. A dividend is the distribution of a company's earnings paid out to shareholders; it's often viewed by its dividend yield, a metric that measures a dividend as a percent of the current stock price. Many academic studies show that dividends make up large portions of long-term returns, and in many cases, dividend contributions surpass one-third of total returns.
Citizens Financial Group in Focus
Headquartered in Providence, Citizens Financial Group (CFG) is a Finance stock that has seen a price change of -31.6% so far this year. The bank is paying out a dividend of $0.42 per share at the moment, with a dividend yield of 6.24% compared to the Financial - Savings and Loan industry's yield of 3.23% and the S&P 500's yield of 1.73%.
In terms of dividend growth, the company's current annualized dividend of $1.68 is up 3.7% from last year. In the past five-year period, Citizens Financial Group has increased its dividend 3 times on a year-over-year basis for an average annual increase of 10.25%. Any future dividend growth will depend on both earnings growth and the company's payout ratio; a payout ratio is the proportion of a firm's annual earnings per share that it pays out as a dividend. Citizens Financial Group's current payout ratio is 36%. This means it paid out 36% of its trailing 12-month EPS as dividend.
Looking at this fiscal year, CFG expects solid earnings growth. The Zacks Consensus Estimate for 2023 is $4.61 per share, with earnings expected to increase 12.44% from the year ago period.
Bottom Line
From greatly improving stock investing profits and reducing overall portfolio risk to providing tax advantages, investors like dividends for a variety of different reasons. It's important to keep in mind that not all companies provide a quarterly payout.
For instance, it's a rare occurrence when a tech start-up or big growth business offers their shareholders a dividend. It's more common to see larger companies with more established profits give out dividends. Income investors must be conscious of the fact that high-yielding stocks tend to struggle during periods of rising interest rates. With that in mind, CFG is a compelling investment opportunity. Not only is it a strong dividend play, but the stock currently sits at a Zacks Rank of 3 (Hold).
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Citizens Financial Group, Inc. (CFG) : Free Stock Analysis Report
