Citizens Financial Preferred Stock Yields Reach 6.5%

Citizens Financial Group's preferred stock offers a 6.5% yield, outpacing the financial sector average. While the stock trades at a significant discount, its non-cumulative nature poses potential risks for investors in case of missed payments.

Date: 01-04-2025

AI Rating: 5

Yield Analysis: The current yield of 6.5% on Citizens Financial's preferred stock (CFG.PRE) is notably above the average yield of 6.59% in the financial preferred stock category. Investors may view this as a potential attraction, especially if the company maintains its dividend policy.

Price Discount: CFG.PRE shares are trading at a 22.60% discount to their liquidation preference amount, significantly higher than the average discount of 10.08%. This disparity indicates market sentiment may be pessimistic regarding the company’s future performance or its ability to sustain dividend payments.

The non-cumulative nature of these preferred shares introduces an additional layer of risk. In the event of missed payments, shareholders do not have recourse to recover missed dividends before common shareholders receive theirs. This aspect may concern risk-averse investors, as it compounds the uncertainty surrounding cash flows and dividend reliability.

Market Performance: The performance chart displayed suggests that both CFG.PRE and common shares (CFG) have been in decline, with common shares down 1.2% during the same trading session. Such a correlation may hint at broader market sentiments affecting the Financial sector, possibly impacting future earnings expectations.

Stocks: CFG