Merchants Bancshares,Inc. (NASDAQ: MBVT) and Citizens Financial Group (NYSE:CFG) are both commercial banks companies, but which is the superior investment? We will contrast the two companies based on the strength of their dividends, institutional ownership, valuation, risk, earnings, analyst recommendations and profitability.
Risk and Volatility
Merchants Bancshares,Inc. has a beta of 0.91, suggesting that its share price is 9% less volatile than the S&P 500. Comparatively, Citizens Financial Group has a beta of 1.35, suggesting that its share price is 35% more volatile than the S&P 500.
Earnings & Valuation
This table compares Merchants Bancshares,Inc. and Citizens Financial Group’s top-line revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||NetIncome||Earnings Per Share||Price/Earnings Ratio|
|Citizens Financial Group||$5.76 billion||3.18||$1.05 billion||$2.47||15.06|
Citizens Financial Group has higher revenue and earnings than Merchants Bancshares,Inc.. Citizens Financial Group is trading at a lower price-to-earnings ratio than Merchants Bancshares,Inc., indicating that it is currently the more affordable of the two stocks.
This is a breakdown of current ratings and recommmendations for Merchants Bancshares,Inc. and Citizens Financial Group, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Citizens Financial Group||2||7||6||0||2.27|
Citizens Financial Group has a consensus price target of $38.29, suggesting a potential upside of 2.92%. Given Citizens Financial Group’s higher probable upside, analysts clearly believe Citizens Financial Group is more favorable than Merchants Bancshares,Inc..
This table compares Merchants Bancshares,Inc. and Citizens Financial Group’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Citizens Financial Group||20.26%||6.44%||0.84%|
Institutional & Insider Ownership
38.6% of Merchants Bancshares,Inc. shares are held by institutional investors. Comparatively, 98.2% of Citizens Financial Group shares are held by institutional investors. 8.8% of Merchants Bancshares,Inc. shares are held by company insiders. Comparatively, 0.2% of Citizens Financial Group shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.
Merchants Bancshares,Inc. pays an annual dividend of $1.12 per share and has a dividend yield of 2.2%. Citizens Financial Group pays an annual dividend of $0.72 per share and has a dividend yield of 1.9%. Merchants Bancshares,Inc. pays out 51.6% of its earnings in the form of a dividend. Citizens Financial Group pays out 29.1% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Citizens Financial Group has increased its dividend for 2 consecutive years.
Citizens Financial Group beats Merchants Bancshares,Inc. on 9 of the 13 factors compared between the two stocks.
About Merchants Bancshares,Inc.
Merchants Bancshares, Inc. is a bank holding company. The Company’s subsidiary, Merchants Bank (the Bank), is a commercial bank. The Bank offers a range of deposit, loan, cash management and trust services to meet the financial needs of individual consumers, businesses and municipalities. Merchants Bank’s trust division offers investment management, financial planning and trustee services. The Bank offers commercial, financial and agricultural loans, municipal loans, residential real estate loans, commercial real estate loans, construction real estate loans and consumer installment loans for various personal needs, including vehicle and boat financing. The Bank’s deposits include demand; savings and interest bearing checking and money market accounts, and time deposits.
About Citizens Financial Group
Citizens Financial Group, Inc. is a retail bank holding company. The Company operates through two segments: Consumer Banking and Commercial Banking. Its Consumer Banking serves retail customers and small businesses. Consumer Banking products and services include deposit products, mortgage and home equity lending, auto financing, student loans, personal unsecured lines and loans, credit cards, business loans, wealth management and investment services. The Company’s Commercial Banking segment offers a range of financial products and solutions, including lending and leasing, deposit and treasury management services, foreign exchange and interest rate risk management solutions, as well as corporate finance, merger and acquisition, and debt and equity capital markets capabilities. The Company delivers a range of retail and commercial banking products and services to individuals, institutions and companies. As of December 31, 2016, the Company operated approximately 1,200 branches.
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