Critical Analysis: Citizens Financial Group (NYSE:CFG) versus Patriot National Bancorp (NASDAQ:PNBK)

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

Volatility and Risk

Citizens Financial Group has a beta of 0.74, indicating that its share price is 26% less volatile than the S&P 500. Comparatively, Patriot National Bancorp has a beta of -0.63, indicating that its share price is 163% less volatile than the S&P 500.

Analyst Ratings

This is a summary of current ratings and price targets for Citizens Financial Group and Patriot National Bancorp, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Citizens Financial Group	0	5	15	2	2.86
Patriot National Bancorp	1	0	0	0	1.00

Citizens Financial Group currently has a consensus target price of $57.24, suggesting a potential downside of 3.30%. Given Citizens Financial Group’s stronger consensus rating and higher possible upside, research analysts clearly believe Citizens Financial Group is more favorable than Patriot National Bancorp.

Earnings and Valuation

This table compares Citizens Financial Group and Patriot National Bancorp”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Citizens Financial Group	$12.36 billion	2.06	$1.51 billion	$3.57	16.58
Patriot National Bancorp	$60.72 million	3.64	-$39.88 million	($2.70)	-0.71

Citizens Financial Group has higher revenue and earnings than Patriot National Bancorp. Patriot National 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.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Citizens Financial Group	14.17%	7.48%	0.78%
Patriot National Bancorp	-35.17%	-37.63%	-2.08%

Insider & Institutional Ownership

94.9% of Citizens Financial Group shares are held by institutional investors. Comparatively, 39.3% of Patriot National Bancorp shares are held by institutional investors. 0.7% of Citizens Financial Group shares are held by insiders. Comparatively, 11.0% of Patriot National Bancorp shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Summary

Citizens Financial Group beats Patriot National Bancorp on 13 of the 15 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 Patriot National Bancorp

Patriot National Bancorp, Inc. operates as the holding company for Patriot Bank, N.A. that provides community banking services to individuals, small and medium-sized businesses, and professionals. The company accepts consumer and commercial deposit accounts, such as checking, interest-bearing negotiable order of withdrawal, money market, time certificates of deposit, savings, prepaid deposit, on-line national money market, individual retirement accounts, and health savings accounts, as well as certificate of deposit account registry service. Its loan portfolio comprises commercial real estate, commercial business, small business administration, construction, purchased residential real estate, and various consumer loans. The company also offers automated clearing house transfers, lockbox, internet banking, bill payment, remote deposit capture, debit card, money order, traveler's check, and automatic teller machine services. Patriot National Bancorp, Inc. was founded in 1994 and is headquartered in Stamford, Connecticut.