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Citizens Financial (CFG) Announces New Share Repurchase Plan

Citizens Financial Group CFG announced an addition to the company’s share repurchase program by $1.15 billion. As of Dec 31, 2022, $850 million of capacity from the previous share repurchase program remained unutilized. Hence, the total authorization is $2 billion at present.

CFG’s previous share repurchase plan, which was announced on Jun 27, 2022, had authorized to buy back $1 billion worth of shares. The company had suspended its buyback program in second-quarter 2021 for the Investors Bancorps’ merger and resumed the same in the fourth quarter of 2022, repurchasing $150 million in common stock in the said quarter.

In the first quarter of 2023, Citizens Financial expects to repurchase shares worth $400 million.

Alongside share repurchases, Citizens Financial pays regular dividends, with annual hikes. The last hike of 7.7% was announced in July 2022. The company currently pays 42 cents per share as a quarterly dividend.

Considering the last day’s closing price of $43.18, Citizens Financial’s dividend yield is 3.89% currently, which is impressive compared with the industry average of 2.66%. The yield, representing a steady income stream, attracts investors.

The company raised its quarterly dividends 5 times in the last five years. Also, it has a five-year annualized dividend growth of 12.27%. Currently, the company's payout ratio is 35% of earnings.

Supported by its earnings strength and solid balance sheet, the company is expected to continue with efficient capital deployment activities.

Additionally, CFG has been undertaking inorganic expansions to bolster shareholder value, and strengthen product and fee-generation capabilities. Last year, it acquired College Raptor, Inc., DH Capital LLC, Investors Bancorp, and 80 East Coast branches and the national online deposit business from HSBC Bank U.S.A, N.A. In September 2021, the company acquired Willamette Management Associates.

Over the past six months, shares of Citizens Financial have gained 13.3%, outperforming a 1.9% rise of the industry it belongs to.

 

Zacks Investment Research
Zacks Investment Research


Image Source: Zacks Investment Research

 

Currently, CFG carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Enhanced Capital Deployment Plans of Other Banks

Since the beginning of 2023, banks like Prosperity Bancshares, Inc. PB and Zions Bancorporation ZION announced their share repurchase plans.

Prosperity Bancshares’ board of directors authorized a share repurchase program under which it can repurchase up to 5%, which is 4.6 million of its shares. PB’s program expires on Jan 17, 2024.

Similarly, Zions Bancorp’s board of directors authorized a share repurchase for the first quarter of 2023. ZION's program is worth up to $50 million of shares.

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Zions Bancorporation, N.A. (ZION) : Free Stock Analysis Report

Prosperity Bancshares, Inc. (PB) : Free Stock Analysis Report

Citizens Financial Group, Inc. (CFG) : Free Stock Analysis Report

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