Financial Comparison: Capital Bancorp (NASDAQ:CBNK) and Citizens Financial Group (NYSE:CFG)

Capital Bancorp (NASDAQ:CBNK) and Citizens Financial Group (NYSE:CFG) are both finance companies, but which is the superior business? We will compare the two companies based on the strength of their dividends, risk, analyst recommendations, profitability, earnings, institutional ownership and valuation.

Risk and Volatility

Capital Bancorp has a beta of 0.55, indicating that its share price is 45% less volatile than the S&P 500. Comparatively, Citizens Financial Group has a beta of 0.7, indicating that its share price is 30% less volatile than the S&P 500.

Dividends

Capital Bancorp pays an annual dividend of $0.48 per share and has a dividend yield of 1.6%. Citizens Financial Group pays an annual dividend of $1.84 per share and has a dividend yield of 3.0%. Capital Bancorp pays out 14.5% of its earnings in the form of a dividend. Citizens Financial Group pays out 43.5% 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. Capital Bancorp has raised its dividend for 3 consecutive years.

Institutional & Insider Ownership

56.1% of Capital Bancorp shares are owned by institutional investors. Comparatively, 94.9% of Citizens Financial Group shares are owned by institutional investors. 33.5% of Capital Bancorp shares are owned by insiders. Comparatively, 0.7% of Citizens Financial Group shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Profitability

This table compares Capital Bancorp and Citizens Financial Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Capital Bancorp	17.48%	13.48%	1.51%
Citizens Financial Group	16.21%	8.31%	0.88%

Analyst Recommendations

This is a summary of recent ratings and target prices for Capital Bancorp and Citizens Financial Group, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Capital Bancorp	0	2	3	0	2.60
Citizens Financial Group	0	1	19	0	2.95

Capital Bancorp currently has a consensus price target of $35.33, indicating a potential upside of 17.78%. Citizens Financial Group has a consensus price target of $70.88, indicating a potential upside of 16.54%. Given Capital Bancorp’s higher possible upside, research analysts clearly believe Capital Bancorp is more favorable than Citizens Financial Group.

Earnings and Valuation

This table compares Capital Bancorp and Citizens Financial Group”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Capital Bancorp	$310.06 million	1.58	$57.17 million	$3.31	9.06
Citizens Financial Group	$8.48 billion	3.03	$1.83 billion	$4.23	14.38

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

Summary

Citizens Financial Group beats Capital Bancorp on 10 of the 17 factors compared between the two stocks.

About Capital Bancorp

Capital Bancorp, Inc. operates as the bank holding company for Capital Bank, N.A. that provides various banking products and services to businesses, not-for-profit associations, and entrepreneurs in Maryland, Virginia, and the District of Columbia. It operates through Commercial Banking, Capital Bank Home Loans, and OpenSky segments. The company offers a range of deposit products, including checking and savings, time, interest bearing and noninterest-bearing demand, and money market accounts, as well as certificates of deposit; and credit cards. It also originates residential mortgages; issues trust preferred securities; and provides residential and commercial real estate, construction, and commercial and industrial loans, as well as other consumer loans, such as term loans, car loans, and boat loans to small to medium-sized businesses, professionals, real estate investors, and small residential builders and individuals. Capital Bancorp, Inc. was founded in 1974 and is headquartered in Rockville, Maryland.

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.