Citizens Financial Group (NYSE: CFG) and Western Alliance Bancorporation (NYSE:WAL) are both mid-cap finance companies, but which is the superior investment? We will compare the two companies based on the strength of their valuation, institutional ownership, dividends, earnings, profitability, analyst recommendations and risk.
Institutional and Insider Ownership
98.5% of Citizens Financial Group shares are owned by institutional investors. Comparatively, 81.9% of Western Alliance Bancorporation shares are owned by institutional investors. 0.2% of Citizens Financial Group shares are owned by insiders. Comparatively, 8.0% of Western Alliance Bancorporation shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.
This table compares Citizens Financial Group and Western Alliance Bancorporation’s top-line revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Citizens Financial Group||$6.45 billion||3.57||$1.65 billion||$3.27||14.32|
|Western Alliance Bancorporation||$743.42 million||8.46||$259.79 million||$2.92||20.41|
Citizens Financial Group has higher revenue and earnings than Western Alliance Bancorporation. Citizens Financial Group is trading at a lower price-to-earnings ratio than Western Alliance Bancorporation, indicating that it is currently the more affordable of the two stocks.
This is a breakdown of recent ratings and target prices for Citizens Financial Group and Western Alliance Bancorporation, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Citizens Financial Group||2||4||7||0||2.38|
|Western Alliance Bancorporation||0||0||9||0||3.00|
Citizens Financial Group presently has a consensus target price of $41.08, indicating a potential downside of 12.25%. Western Alliance Bancorporation has a consensus target price of $63.39, indicating a potential upside of 6.34%. Given Western Alliance Bancorporation’s stronger consensus rating and higher possible upside, analysts plainly believe Western Alliance Bancorporation is more favorable than Citizens Financial Group.
This table compares Citizens Financial Group and Western Alliance Bancorporation’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Citizens Financial Group||25.60%||6.73%||0.88%|
|Western Alliance Bancorporation||36.16%||15.37%||1.67%|
Citizens Financial Group pays an annual dividend of $0.72 per share and has a dividend yield of 1.5%. Western Alliance Bancorporation does not pay a dividend. Citizens Financial Group pays out 22.0% of its earnings in the form of a dividend. Western Alliance Bancorporation has raised its dividend for 3 consecutive years.
Risk & Volatility
Citizens Financial Group has a beta of 1.37, suggesting that its share price is 37% more volatile than the S&P 500. Comparatively, Western Alliance Bancorporation has a beta of 1.76, suggesting that its share price is 76% more volatile than the S&P 500.
Western Alliance Bancorporation beats Citizens Financial Group on 12 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 Western Alliance Bancorporation
Western Alliance Bancorporation is a bank holding company. The Company provides a range of deposit, lending, treasury management, international banking and online banking products and services through its banking subsidiary, Western Alliance Bank (WAB or the Bank). The Company’s regional segments include Arizona, Nevada, Southern California and Northern California, which provide banking and related services to their respective markets. The operations from the regional segments correspond to the banking divisions, which include Alliance Bank of Arizona (ABA) in Arizona, Bank of Nevada (BON) and First Independent Bank (FIB) in Nevada, Torrey Pines Bank (TPB) in Southern California, and Bridge Bank in Northern California. The Company’s National Business Lines (NBL) segments include HOA Services, Hotel Franchise Finance (HFF), Public & Nonprofit Finance, Technology & Innovation, Other NBLs, which provide specialized banking services to niche markets.
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