#7 - Citizens Financial Group (NYSE:CFG)
The last bank stock on this list Citizens Financial Group, Inc. (NYSE: CFG). Like most of the other stocks on this list Citizens Financial was up 12% before the March sell-off. One of the reasons to like CFG stock is its focus on improving its return on tangible common equity (ROTCE). This measures the performance and profitability of a bank and gives analysts a sense of how well it uses its capital. The bank has recently raised its ROTCE outlook to between 16% and 18%.
Citizens Financial Group has a Moderate Buy rating and a $48.17 consensus price target. That’s a 56% gain from the stock’s current level. The bank also sports a dividend with a dividend yield of 5.44% that looks safe with earnings expected to grow by approximately 14% in the next five years.
About Citizens Financial Group
Citizens Financial Group, Inc operates as the bank holding company that provides retail and commercial banking products and services to individuals, small businesses, middle-market companies, corporations, and institutions in the United States. The company operates in two segments, Consumer Banking and Commercial Banking.
Read More - Current Price
- $44.77
- Consensus Rating
- Moderate Buy
- Ratings Breakdown
- 10 Buy Ratings, 8 Hold Ratings, 0 Sell Ratings.
- Consensus Price Target
- $47.78 (6.7% Upside)
Many investors have never had to deal with how to invest in bank stocks in a rising interest rate environment. The onset of the financial crisis in 2008 sparked an unprecedented period of low interest rates and quantitative easing. Both of these monetary policy initiatives created a favorable environment for bank stocks.
That changed dramatically in 2022 as the Federal Reserve began a campaign of raising interest rates to tamp down inflation that soared to near 40-year highs. While investors won't be seeing a return to the 20% interest rates seen in the early 1980s, even rates over 5% will seem uncomfortable to a generation of investors accustomed to low rates.
And it may get uncomfortable for the banks as well. However, while there are likely to be some banks that don't survive this period of high rates, the banks on this list are well capitalized. In fact, many will benefit as depositors use them as a flight to safety for their capital.
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