Cullen/Frost Bankers, Inc. (NYSE: CFR)

Sector: Financial Services Industry: Banks - Regional CIK: 0000039263
Market Cap 8.32 Bn
P/B 1.87
P/E 13.20
P/S 3.89
ROIC (Qtr) 7.00
Div Yield % 3.04
Rev 1y % (Qtr) 12.40
Total Debt (Qtr) 4.82 Bn
Debt/Equity (Qtr) 1.08

About

Cullen/Frost Bankers, Inc. (CFR), often recognized by its stock symbol Cullen/Frost, is a financial holding company and bank holding company based in San Antonio, Texas. It operates in the financial services industry, providing a diverse range of products and services to customers across various markets in Texas. The company's primary business activities encompass commercial and consumer banking, trust and investment management, insurance, brokerage, mutual funds, leasing, treasury management, capital markets advisory, and item processing services....

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Price action

Investment thesis

Bull case

  • Strong tangible asset base of 52.53B provides 10.90x coverage of total debt 4.82B, indicating robust asset backing and low credit risk.
  • Retained earnings of 4.23B represent substantial 0.95x of equity 4.46B, indicating strong internal capital generation.

Bear case

  • Operating cash flow of 157.55M barely covers its investment activities of (2.45B), with a coverage ratio of -0.06, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Operating cash flow of 157.55M provides thin coverage of dividend payments of (252.80M) with a -0.62 ratio, suggesting potential dividend sustainability issues if operational performance deteriorates.
  • Free cash flow of 15.81M provides weak coverage of capital expenditures of 141.73M, with a 0.11 ratio suggesting additional external financing needs for growth initiatives.
  • Operating cash flow of 157.55M provides minimal 1.31x coverage of tax expenses of 120.58M, suggesting potential tax planning inefficiencies or unsustainable tax positions.
  • High depreciation of 87.37M relative to operating cash flow of 157.55M, which is 0.55x suggests significant maintenance capital requirements affecting free cash flow.

Peer comparison

Companies in the Banks - Regional
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 USB Us Bancorp \De\ 84.44 Bn 12.40 3.25 77.98 Bn
2 PNC Pnc Financial Services Group, Inc. 84.36 Bn 13.61 3.73 62.34 Bn
3 NU Nu Holdings Ltd. 81.47 Bn 32.21 5.79 4.49 Bn
4 NWG NatWest Group plc 66.53 Bn 9.88 3.05 169.04 Bn
5 TFC Truist Financial Corp 64.60 Bn 13.18 3.53 71.11 Bn
6 MTB M&T Bank Corp 32.73 Bn 12.47 3.60 14.99 Bn
7 FITB Fifth Third Bancorp 31.96 Bn 14.15 3.93 18.94 Bn
8 FCNCA First Citizens Bancshares Inc /De/ 28.98 Bn 12.78 3.26 40.00 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 0.11 0.14
EV to Cash from Ops. EV/CFO 37.27 7.21
EV to Debt EV to Debt 1.22 5.20
EV to EBIT EV/EBIT 7.75 14.98
EV to EBITDA EV/EBITDA 6.95 8.92
EV to Free Cash Flow [EV/FCF] EV/FCF 371.24 8.87
EV to Market Cap EV to Market Cap 0.71 1.04
EV to Revenue EV/Rev 2.74 -3.76
Price to Book Value [P/B] P/B 1.87 1.17
Price to Earnings [P/E] P/E 13.20 15.63
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) 2.43 271.44
Dividend Payout Ratio % Div Payout % (Qtr) 40.10 35.28
Dividend per Basic Share Div per Share (Qtr) 3.90 0.89
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 1,585.37 34.52
Interest Coverage Interest Coverage 0.00 -0.05
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) -8.46 -73.15
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) -13.68 15.78
Dividend Growth (1y) % Div 1y % (Qtr) 5.12 5.32
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 20.16 110.93
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 18.32 38.80
EBIT Growth (1y) % EBIT 1y % (Qtr) 19.77 61.46
EBT Growth (1y) % EBT 1y % (Qtr) 19.77 61.37
EPS Growth (1y) % EPS 1y % (Qtr) 20.60 76.34
FCF Growth (1y) % FCF 1y % (Qtr) -97.78 161.72
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 9.02 14.15
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.04 0.04
Cash Payout Ratio Cash Payout (Qtr) 0.86 0.26
Cash Ratio Cash Ratio 0.00 0.00
Current Ratio Current Ratio 0.00 0.01
Debt to Equity Ratio Debt/Equity (Qtr) 1.08 0.53
Interest Cover Ratio Interest Cover Ratio 0.00 -0.05
Times Interest Earned Times Interest Earned 0.00 -0.05
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 39.50 147.97
EBIT Margin % EBIT Margin % (Qtr) 35.38 155.41
EBT Margin % EBT Margin % (Qtr) 35.38 154.66
Gross Margin % Gross Margin % (Qtr) 100.00 97.82
Net Profit Margin % Net Margin % (Qtr) 29.40 115.63