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

Profitability

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

Net Margins Return on Equity Return on Assets
Texas Capital Bancshares 22.15% 12.87% 1.06%
Citizens Financial Group 22.20% 8.75% 1.11%

Institutional & Insider Ownership

89.4% of Texas Capital Bancshares shares are held by institutional investors. Comparatively, 96.0% of Citizens Financial Group shares are held by institutional investors. 0.5% of Texas Capital Bancshares shares are held by insiders. Comparatively, 0.3% of Citizens Financial Group shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Analyst Ratings

This is a breakdown of recent recommendations for Texas Capital Bancshares and Citizens Financial Group, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Texas Capital Bancshares 1 8 3 0 2.17
Citizens Financial Group 0 2 7 0 2.78

Texas Capital Bancshares presently has a consensus target price of $62.18, indicating a potential upside of 17.43%. Citizens Financial Group has a consensus target price of $42.28, indicating a potential upside of 10.97%. Given Texas Capital Bancshares’ higher possible upside, equities research analysts clearly believe Texas Capital Bancshares is more favorable than Citizens Financial Group.

Valuation & Earnings

This table compares Texas Capital Bancshares and Citizens Financial Group’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Texas Capital Bancshares $1.46 billion 1.83 $322.87 million $6.23 8.50
Citizens Financial Group $8.07 billion 2.05 $1.79 billion $3.84 9.92

Citizens Financial Group has higher revenue and earnings than Texas Capital Bancshares. Texas Capital Bancshares 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.

Risk and Volatility

Texas Capital Bancshares has a beta of 1.88, indicating that its share price is 88% more volatile than the S&P 500. Comparatively, Citizens Financial Group has a beta of 1.5, indicating that its share price is 50% more volatile than the S&P 500.

Summary

Citizens Financial Group beats Texas Capital Bancshares on 9 of the 14 factors compared between the two stocks.

Texas Capital Bancshares Company Profile

Texas Capital Bancshares, Inc. operates as the bank holding company for Texas Capital Bank, National Association that provides various banking products and services for commercial businesses, and professionals and entrepreneurs. It offers business deposit products and services, including commercial checking accounts, lockbox accounts, and cash concentration accounts, as well as other treasury management services, including information services, wire transfer initiation, ACH initiation, account transfer, and service integration; and consumer deposit products, such as checking accounts, savings accounts, money market accounts, and certificates of deposit. The company also provides commercial loans for general corporate purposes comprising financing for working capital, internal growth, and acquisitions, as well as financing for business insurance premiums; real estate term and construction loans; mortgage warehouse lending; mortgage correspondent aggregation; equipment finance and leasing; medium- and long-term tax-exempt loans; treasury management services, including online banking and debit and credit card services; and letters of credit. In addition, it offers personal wealth management and trust services; secured and unsecured loans; and online and mobile banking services. It operates in Austin, Dallas, Fort Worth, Houston, and San Antonio metropolitan areas of Texas. Texas Capital Bancshares, Inc. was founded in 1996 and is headquartered in Dallas, Texas.

Citizens Financial Group Company Profile

Citizens Financial Group, Inc. operates as the bank holding company for Citizens Bank, National Association and Citizens Bank of Pennsylvania that provides retail and commercial banking products and services in the United States. The company operates in two segments, Consumer Banking and Commercial Banking. The Consumer Banking segment offers traditional banking products and services, including checking and savings accounts, home and education loans, credit cards, business loans, mortgage and home equity lending, and unsecured product finance and personal loans, as well as wealth management and investment services to retail customers and small businesses. This segment also provides indirect auto finance for new and used vehicles through auto dealerships. The Commercial Banking segment offers various financial products and solutions, such as loans and leasing, trade finance, deposit and treasury management, cash management, and foreign exchange and interest rate risk management solutions; and corporate finance, merger and acquisition, and debt and equity capital markets capabilities. It serves government banking, not-for-profit, healthcare, technology, professionals, oil and gas, asset finance, franchise finance, asset-based lending, commercial real estate, private equity, and sponsor finance industries. Citizens Financial Group, Inc. operates approximately 1,100 branches and 2,900 ATMs in 11 states in the New England, Mid-Atlantic, and Midwest regions, as well as through online, telephone, and mobile banking services; and maintains approximately 140 retail and commercial non-branch offices in its banking footprint and in other states, and the District of Columbia. 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.

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