Analyzing Citizens Financial Group (NYSE:CFG) and HomeStreet (NASDAQ:HMST)

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

Valuation & Earnings

This table compares Citizens Financial Group and HomeStreet’s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Citizens Financial Group	$12.19 billion	1.33	$1.61 billion	$2.76	12.88
HomeStreet	$441.66 million	0.51	-$27.51 million	($2.13)	-5.56

Citizens Financial Group has higher revenue and earnings than HomeStreet. HomeStreet 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.

Analyst Ratings

This is a breakdown of recent ratings for Citizens Financial Group and HomeStreet, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Citizens Financial Group	0	9	7	0	2.44
HomeStreet	0	3	1	0	2.25

Citizens Financial Group presently has a consensus price target of $37.73, suggesting a potential upside of 6.11%. HomeStreet has a consensus price target of $12.00, suggesting a potential upside of 1.27%. Given Citizens Financial Group’s stronger consensus rating and higher probable upside, analysts clearly believe Citizens Financial Group is more favorable than HomeStreet.

Risk & Volatility

Citizens Financial Group has a beta of 1.1, suggesting that its share price is 10% more volatile than the S&P 500. Comparatively, HomeStreet has a beta of 1.38, suggesting that its share price is 38% more volatile than the S&P 500.

Institutional and Insider Ownership

94.9% of Citizens Financial Group shares are owned by institutional investors. Comparatively, 74.7% of HomeStreet shares are owned by institutional investors. 0.6% of Citizens Financial Group shares are owned by insiders. Comparatively, 4.6% of HomeStreet shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Citizens Financial Group	11.52%	6.62%	0.64%
HomeStreet	-8.97%	-0.43%	-0.02%

Summary

Citizens Financial Group beats HomeStreet on 12 of the 14 factors compared between 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 HomeStreet

HomeStreet, Inc. operates as the bank holding company for HomeStreet Bank that provides commercial, mortgage, and consumer/retail banking services in the Western United States. The company offers personal and business checking, savings, interest-bearing negotiable order of withdrawal, and money market accounts, as well as certificates of deposit; credit cards; insurance; and treasury management services. Its loan products include commercial real estate (CRE), multifamily, construction and land development, owner occupied CRE and commercial business loans; and single family, home equity, and other loans. In addition, the company offers online, mobile, and telephone banking. It serves small and medium sized businesses, real estate investors, professional firms, and individuals. The company operates through branches and ATMs. The company was formerly known as Continental Mortgage and Loan Company. HomeStreet, Inc. was incorporated in 1921 and is headquartered in Seattle, Washington.