CFG - Citizens Financial Group: Two Good Income Options
2024-05-09 16:05:27 ET
Summary
- Citizens Financial Group is struggling to maintain earnings growth and deposits in a high-interest rate environment.
- The bank has seen a decline in net interest income and a decrease in lending.
- Despite these challenges, the bank has a leverage ratio under the commercial bank average and access to fresh capital if needed.
- In addition to the floating preferred share, there's a new fixed/float bond that provides attractive income.
Citizens Financial Group ( CFG ) is a regional bank that has joined its industry peers in struggling to maintain earnings and deposits in an environment of high-interest rates. Back in November, I wrote on the opportunity being presented with the bank’s Series D preferred shares (CFG PR D). These shares will begin floating at a rate of three-month SOFR plus 390 basis points with their next dividend declaration. Based on today’s market pricing, the dividend yield would be just under 8.5%. For investors, I believe this represents one of two good income options for Citizens Financial Group....
Citizens Financial Group: Two Good Income Options