Why Is Citizens Financial Group, Inc. (CFG) Among the Best Bank Stocks to Invest In Now?

In the current market landscape, investors are keeping a close eye on the resurgence of the "Trump Trade," as signs suggest that Donald Trump may win the upcoming election. This perception is influencing certain industry sectors and financial assets, with bank stocks being one of the beneficiaries. Citizens Financial Group, Inc. (CFG) stands out as a compelling investment opportunity among bank stocks, driven by its robust financial performance and dividend policy.

CFG's return on equity (ROE) of 5.43% and return on assets (ROA) of 0.58% may not be as high as some of its peers, but they are commendable considering the current economic climate. Moreover, CFG's ROE and ROA have been improving, with a year-over-year increase of 1.2% and 0.1%, respectively. This improvement, coupled with a strong dividend yield of 3.57% and a payout ratio of 66.36%, indicates a commitment to shareholder value.

CFG's earnings per share (EPS) growth has been consistent over the past five years. In 2019, EPS was $2.17, increasing to $2.53 in 2023, a 16.1% growth rate. This steady growth, along with a solid balance sheet and a net cash position of -$2.82 billion or -$6.40 per share, makes CFG an attractive investment option in the banking sector.

CFG's dividend policy has contributed significantly to its shareholder yield and overall investor appeal. The company has increased its dividend for two consecutive years, demonstrating a commitment to returning value to shareholders. Additionally, CFG's shareholder yield of 8.62% reflects the combination of its dividend yield and buyback yield, further enhancing its appeal to investors seeking income and capital appreciation.

In conclusion, Citizens Financial Group, Inc. (CFG) is among the best bank stocks to invest in now, given its robust financial performance, dividend policy, and consistent earnings growth. As the market continues to evolve, investors should monitor CFG's progress and consider its potential as a strategic addition to their portfolios.