4. Citizens Financial Group, Inc. (NYSE:CFG)
Forward P/E: 13.26
Number of Hedge Fund Holders: 47
Cramer views Citizens Financial Group, Inc. (NYSE:CFG) positively and said that it is among the bank stocks that are nearing pre-Silicon Valley Bank collapse levels. He believes regional banks are moving in a favorable direction. He has highlighted that the shift toward rate cuts by the Federal Reserve will likely benefit these institutions, even if the reductions are gradual.
“It’s a Northeast bank, it’s called Citizens Financial Group. I haven’t focused on it since it was spun off by the Royal Bank of Scotland a decade ago. When you take a closer look at Citizens, it’s got some of the best capital ratios of large regional banks. That matters for a couple of reasons. First, it offers safety. This is how you know Citizens won’t be the next First Republic if we have another banking blow-up. But more importantly, in calmer times, it gives them [the] flexibility to do other shareholder-friendly things, dividends [and] buybacks. In fact, in late July, after hearing all the regional banks report second-quarter earnings, analysts at Deutsche Bank called Citizens Financial their top pick in the sector, citing strong earnings growth potential as net interest margins normalize, growth initiatives pay off like the private bank build-out and their expansion in New York City and mortgage demand bounced back thanks to lower rates. Deutsche Bank analysts also know that Citizen has been held back in recent quarters by some significant one-off items. But management is signaling that there shouldn’t be much more of an impact from that kind of thing going forward. That all sounds real good to me. So count me in as a believer in Citizens Financial.”
Citizens Financial Group (NYSE:CFG) operates as a bank holding company, providing an extensive range of retail and commercial banking services. In its third-quarter report released on October 16, the company reported earnings per share of $0.79, alongside a 5.5% decline in revenue, which totaled $1.9 billion compared to the previous year.
The company’s Private Bank was highlighted in the report as it now holds $5.6 billion in deposits and $4.1 billion in assets under management. The company has also seen significant growth in the New York City Metro region and is preparing to launch a TOP 10 program expected to have a $100 million impact. Bruce Van Saun, Chairman and CEO, emphasized that the balance sheet remains strong, with solid capital, liquidity, funding, and loan loss reserves. Despite the challenges faced in the third quarter, including the effects of forward-starting swaps initiated in July and some fees being deferred to the fourth quarter, management remains optimistic about a strong performance in Q4 and the beginning of 2025.
Additionally, Citizens Financial Group (NYSE:CFG) announced a quarterly dividend of $0.42 per share, which will be payable on November 13 to shareholders on record as of October 30.