Citizens Financial Group (NYSE: CFG) and 1st Source Corporation (NASDAQ:SRCE) are both finance companies, but which is the superior stock? We will contrast the two businesses based on the strength of their analyst recommendations, institutional ownership, earnings, risk, profitability, valuation and dividends.

Volatility & Risk

Citizens Financial Group has a beta of 1.37, indicating that its stock price is 37% more volatile than the S&P 500. Comparatively, 1st Source Corporation has a beta of 1.07, indicating that its stock price is 7% more volatile than the S&P 500.

Insider & Institutional Ownership

96.5% of Citizens Financial Group shares are owned by institutional investors. Comparatively, 70.4% of 1st Source Corporation shares are owned by institutional investors. 0.2% of Citizens Financial Group shares are owned by company insiders. Comparatively, 20.3% of 1st Source Corporation shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Dividends

Citizens Financial Group pays an annual dividend of $0.72 per share and has a dividend yield of 1.9%. 1st Source Corporation pays an annual dividend of $0.76 per share and has a dividend yield of 1.5%. Citizens Financial Group pays out 29.1% of its earnings in the form of a dividend. 1st Source Corporation pays out 30.4% 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 31 consecutive years and 1st Source Corporation has increased its dividend for 2 consecutive years. Citizens Financial Group is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Earnings and Valuation

This table compares Citizens Financial Group and 1st Source Corporation’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Citizens Financial Group $5.17 billion 3.68 $1.24 billion $2.47 15.40
1st Source Corporation $261.58 million 5.15 $64.84 million $2.50 20.77

Citizens Financial Group has higher revenue and earnings than 1st Source Corporation. Citizens Financial Group is trading at a lower price-to-earnings ratio than 1st Source Corporation, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Citizens Financial Group and 1st Source Corporation’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%
1st Source Corporation 21.74% 9.43% 1.16%

Analyst Ratings

This is a summary of recent recommendations and price targets for Citizens Financial Group and 1st Source Corporation, 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
1st Source Corporation 0 2 1 0 2.33

Citizens Financial Group presently has a consensus target price of $38.29, suggesting a potential upside of 0.67%. 1st Source Corporation has a consensus target price of $51.67, suggesting a potential downside of 0.49%. Given Citizens Financial Group’s higher possible upside, equities research analysts plainly believe Citizens Financial Group is more favorable than 1st Source Corporation.

Summary

Citizens Financial Group beats 1st Source Corporation on 9 of the 17 factors compared between the two stocks.

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.

About 1st Source Corporation

1st Source Corporation is a bank holding company. The Company, through its subsidiaries, provides a range of financial products and services. It is engaged in commercial banking. 1st Source Bank (Bank), its banking subsidiary, offers commercial and consumer banking services, trust and wealth advisory services, and insurance to individual and business clients. The Bank offers a range of consumer and commercial banking services through its lending operations, retail branches and fee based businesses. It provides commercial, small business, agricultural, and real estate loans to primarily business clients mainly located within its regional market area. It provides a range of consumer banking products and services through its banking centers and at 1stsource.com. It also offers insurance products through 1st Source Insurance offices. It also provides a range of trust, investment, agency, and custodial services for individual, corporate and not-for-profit clients.

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