Bank of America vs Citizens Which Should You Buy?

Bank of America and Citizens Financial Group are two major players in the financial services industry, with both companies offering a range of banking and investment services to customers. Bank of America, one of the largest banks in the United States, has a global presence and offers a wide range of products and services to individuals, businesses, and institutions. Citizens Financial Group, while smaller in size compared to Bank of America, has a strong regional presence in the Northeastern United States and offers a variety of consumer and commercial banking services. In this comparison, we will analyze the stocks of both companies to determine which may be a better investment option.

Bank of America or Citizens?

When comparing Bank of America and Citizens, different investors may prioritize various metrics based on their investment strategies and goals. So, ask yourself what type of investor you are. This will guide you in determining which metrics are most important for your investment decision between Bank of America and Citizens.

Dividend Investors:

Dividend investors look for stable and growing income streams, using dividend metrics to assess potential investments. A company's dividend yield essentially measures the size of its dividend relative to the total market value of the company. Bank of America has a dividend yield of 2.69%, while Citizens has a dividend yield of 9.09%. Beyond the yield itself, considering the growth and sustainability of these dividends is also crucial. Bank of America reports a 5-year dividend growth of 11.24% year and a payout ratio of 40.07%. On the other hand, Citizens reports a 5-year dividend growth of -5.59% year and a payout ratio of 377.59%.

Value Investors:

Value investors focus on financial metrics to determine a stock's intrinsic value compared to its market value. The Price-to-Earnings (P/E) Ratio links stock price to a company's earnings per share, with Bank of America P/E ratio at 16.62 and Citizens's P/E ratio at 69.06. Another crucial valuation metric is the Price-to-Book (P/B) Ratio, which compares stock price with book value per share. Bank of America P/B ratio is 1.32 while Citizens's P/B ratio is 1.15.

Growth Investors:

Growth investors prioritize metrics indicative of a company's expansion potential. Focusing on top-line growth, Bank of America has seen a 5-year revenue growth of 0.37%, while Citizens's is -0.07%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with Bank of America's ROE at 8.03% and Citizens's ROE at 1.83%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are $45.58 for Bank of America and $8.80 for Citizens. Over the past year, Bank of America's prices ranged from $27.42 to $46.52, with a yearly change of 69.65%. Citizens's prices fluctuated between $6.64 and $10.50, with a yearly change of 58.13%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.