Critical Contrast: Citizens Financial Group (NYSE:CFG) and First Financial Bankshares (NASDAQ:FFIN)

Citizens Financial Group (NYSE:CFG) and First Financial Bankshares (NASDAQ:FFIN) are both finance companies, but which is the better business? We will contrast the two businesses based on the strength of their dividends, analyst recommendations, risk, institutional ownership, earnings, valuation and profitability.

Profitability

This table compares Citizens Financial Group and First Financial Bankshares’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Citizens Financial Group	17.18%	8.85%	0.93%
First Financial Bankshares	31.03%	14.00%	1.76%

Risk & Volatility

Citizens Financial Group has a beta of 0.72, meaning that its stock price is 28% less volatile than the S&P 500. Comparatively, First Financial Bankshares has a beta of 0.82, meaning that its stock price is 18% less volatile than the S&P 500.

Insider and Institutional Ownership

94.9% of Citizens Financial Group shares are owned by institutional investors. Comparatively, 69.8% of First Financial Bankshares shares are owned by institutional investors. 0.7% of Citizens Financial Group shares are owned by insiders. Comparatively, 3.8% of First Financial Bankshares shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Dividends

Citizens Financial Group pays an annual dividend of $1.84 per share and has a dividend yield of 2.9%. First Financial Bankshares pays an annual dividend of $0.88 per share and has a dividend yield of 2.7%. Citizens Financial Group pays out 39.9% of its earnings in the form of a dividend. First Financial Bankshares pays out 47.1% 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. First Financial Bankshares has increased its dividend for 15 consecutive years. Citizens Financial Group is clearly the better dividend stock, given its higher yield and lower payout ratio.

Analyst Ratings

This is a summary of recent recommendations for Citizens Financial Group and First Financial Bankshares, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Citizens Financial Group	0	4	16	0	2.80
First Financial Bankshares	0	5	0	1	2.33

Citizens Financial Group currently has a consensus target price of $79.22, suggesting a potential upside of 23.13%. First Financial Bankshares has a consensus target price of $35.80, suggesting a potential upside of 11.35%. Given Citizens Financial Group’s stronger consensus rating and higher probable upside, equities analysts plainly believe Citizens Financial Group is more favorable than First Financial Bankshares.

Earnings & Valuation

This table compares Citizens Financial Group and First Financial Bankshares”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Citizens Financial Group	$8.73 billion	3.11	$1.83 billion	$4.61	13.96
First Financial Bankshares	$833.20 million	5.53	$253.58 million	$1.87	17.19

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

About Citizens Financial Group

Citizens Financial Group, Inc. operates as the bank holding company that provides retail and commercial banking products and services to individuals, small businesses, middle-market companies, corporations, and institutions in the United States. The company operates in two segments, Consumer Banking and Commercial Banking. The Consumer Banking segment offers deposit products, mortgage and home equity lending products, credit cards, business loans, wealth management, and investment services; and auto, education, and point-of-sale finance loans, as well as digital deposit products. This segment serves its customers through telephone service centers, as well as through its online and mobile platforms. The Commercial Banking segment provides various financial products and solutions, including lending and leasing, deposit and treasury management services, foreign exchange, and interest rate and commodity risk management solutions, as well as syndicated loans, corporate finance, mergers and acquisitions, and debt and equity capital markets services. This segment serves corporate banking, healthcare, technology, asset finance, franchise finance, leasing, asset-based lending, commercial real estate, mid-corporate, and private equity sponsor industries. The company was formerly known as RBS Citizens Financial Group, Inc. and changed its name to Citizens Financial Group, Inc. in April 2014. Citizens Financial Group, Inc. was founded in 1828 and is headquartered in Providence, Rhode Island.

About First Financial Bankshares

First Financial Bankshares, Inc., through its subsidiaries, provides commercial banking products and services in Texas. The company offers checking, savings and time deposits; automated teller machines, drive-in, and night deposit services; safe deposit facilities, remote deposit capture, internet banking, mobile banking, payroll cards, funds transfer, and performing other customary commercial banking services; securities brokerage services; and trust and wealth management services, including wealth management, estates administration, oil and gas management, testamentary trusts, revocable and irrevocable trusts, and agency accounts. It also provides commercial and industrial, municipal, agricultural, construction and development, farm, residential, and consumer auto and non-auto, as well as non-owner occupied and owner occupied commercial real estate loans. In addition, the company offers advisory and specialized services related to asset management, investing, purchasing, advertising, public relations, and technology services. First Financial Bankshares, Inc. was founded in 1890 and is headquartered in Abilene, Texas.