We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Why Citizens Financial Group (CFG) is a Great Dividend Stock Right Now
Read MoreHide Full Article
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 that coveted distribution of a company's earnings paid out to shareholders, and investors often view it by its dividend yield, a metric that measures the 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
Citizens Financial Group (CFG - Free Report) is headquartered in Providence, and is in the Finance sector. The stock has seen a price change of 12.93% since the start of the year. The bank is currently shelling out a dividend of $0.42 per share, with a dividend yield of 3.78%. This compares to the Financial - Savings and Loan industry's yield of 2.85% and the S&P 500's yield of 1.57%.
Taking a look at the company's dividend growth, its current annualized dividend of $1.68 is up 3.7% from last year. Over the last 5 years, Citizens Financial Group has increased its dividend 4 times on a year-over-year basis for an average annual increase of 12.27%. 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 35%. This means it paid out 35% of its trailing 12-month EPS as dividend.
CFG is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2023 is $5.04 per share, representing a year-over-year earnings growth rate of 22.93%.
Bottom Line
Investors like dividends for many reasons; they greatly improve stock investing profits, decrease overall portfolio risk, and carry tax advantages, among others. But, not every company offers a quarterly payout.
High-growth firms or tech start-ups, for example, rarely provide their shareholders a dividend, while larger, more established companies that have more secure profits are often seen as the best dividend options. 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).
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Why Citizens Financial Group (CFG) is a Great Dividend Stock Right Now
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 that coveted distribution of a company's earnings paid out to shareholders, and investors often view it by its dividend yield, a metric that measures the 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
Citizens Financial Group (CFG - Free Report) is headquartered in Providence, and is in the Finance sector. The stock has seen a price change of 12.93% since the start of the year. The bank is currently shelling out a dividend of $0.42 per share, with a dividend yield of 3.78%. This compares to the Financial - Savings and Loan industry's yield of 2.85% and the S&P 500's yield of 1.57%.
Taking a look at the company's dividend growth, its current annualized dividend of $1.68 is up 3.7% from last year. Over the last 5 years, Citizens Financial Group has increased its dividend 4 times on a year-over-year basis for an average annual increase of 12.27%. 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 35%. This means it paid out 35% of its trailing 12-month EPS as dividend.
CFG is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2023 is $5.04 per share, representing a year-over-year earnings growth rate of 22.93%.
Bottom Line
Investors like dividends for many reasons; they greatly improve stock investing profits, decrease overall portfolio risk, and carry tax advantages, among others. But, not every company offers a quarterly payout.
High-growth firms or tech start-ups, for example, rarely provide their shareholders a dividend, while larger, more established companies that have more secure profits are often seen as the best dividend options. 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).