Could the ownership structure of Citizens Financial Group, Inc. (NYSE:CFG) tell us anything useful?


If you want to know who actually controls Citizens Financial Group, Inc. (NYSE: CFG), then you’ll need to look at the composition of its share register. Institutions often own shares in larger companies, and we expect to see insiders owning a noticeable percentage of smaller ones. Companies that have been privatized tend to have low insider ownership.

With a market capitalization of US$20 billion, Citizens Financial Group is quite large. We expect to see institutional investors on the register. Companies of this size are also generally well known to retail investors. Looking at our ownership group data (below), it appears that institutions are visible on the share register. We can zoom in on the different ownership groups, to learn more about Citizens Financial Group.

Discover our latest analysis for Citizens Financial Group

NYSE: CFG Ownership Breakdown May 28, 2022

What does institutional ownership tell us about Citizens Financial Group?

Institutional investors typically compare their own returns to the returns of a commonly tracked index. They therefore generally consider buying larger companies that are included in the relevant benchmark.

Citizens Financial Group already has institutions on the share register. Indeed, they hold a respectable stake in the company. This suggests some credibility with professional investors. But we cannot rely solely on this fact since institutions sometimes make bad investments, like everyone else. If multiple institutions change their minds on a stock at the same time, you could see the stock price drop quickly. It is therefore worth checking out the earnings history of Citizens Financial Group below. Of course, the future is what really matters.

NYSE: CFG Earnings and Revenue Growth May 28, 2022

Since institutional investors own more than half of the issued shares, the board will likely have to pay attention to their preferences. Citizens Financial Group is not owned by hedge funds. Our data shows The Vanguard Group, Inc. is the largest shareholder with 9.9% of shares outstanding. With 9.7% and 8.2% of the shares outstanding, respectively, Capital Research and Management Company and BlackRock, Inc. are the second and third largest shareholders.

Looking at the shareholder register, we can see that 50% of the ownership is controlled by the 13 major shareholders, which means that no shareholder has a controlling interest in the ownership.

While it makes sense to study data on a company’s institutional ownership, it also makes sense to study analyst sentiment to find out which way the wind is blowing. A number of analysts cover the stock, so you can look at growth forecasts quite easily.

Insider ownership of Citizens Financial Group

The definition of an insider may differ slightly from country to country, but board members still matter. Management is ultimately responsible to the board of directors. However, it is not uncommon for managers to be members of the management board, especially if they are founders or CEOs.

Most view insider ownership as a positive because it can indicate that the board is well aligned with other shareholders. However, there are times when too much power is concentrated within this group.

Our information suggests that insiders of Citizens Financial Group, Inc. own less than 1% of the company. As this is a large company, we expect insiders to own only a small percentage. But it’s worth noting that they own $111 million worth of stock. Arguably, recent purchases and sales are equally important to consider. You can click here to see if insiders have been buying or selling.

General public property

With a 16% stake, the general public, consisting mainly of individual investors, has some influence over Citizens Financial Group. This size of ownership, although considerable, may not be sufficient to change company policy if the decision is not in line with other large shareholders.

Next steps:

It is always useful to think about the different groups that own shares in a company. But to better understand Citizens Financial Group, we need to consider many other factors. Be aware that Citizens Financial Group displays 3 warning signs in our investment analysis you should know…

If you prefer to find out what analysts are predicting in terms of future growth, don’t miss this free analyst forecast report.

NB: The figures in this article are calculated using trailing twelve month data, which refers to the 12 month period ending on the last day of the month in which the financial statements are dated. This may not be consistent with the annual report figures for the full year.

This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts only using unbiased methodology and our articles are not intended to be financial advice. It is not a recommendation to buy or sell stocks and does not take into account your objectives or financial situation. Our goal is to bring you targeted long-term analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price-sensitive companies or qualitative materials. Simply Wall St has no position in the stocks mentioned.


Comments are closed.