Updated 3/6/25
Citizens Financial Services, Inc. (CZFS) is a Pennsylvania-based regional bank that has built its reputation by serving local communities through its subsidiary, First Citizens Community Bank. While it may not be a household name, it has quietly grown into a steady and dependable financial institution with a strong focus on community banking, mortgage lending, and commercial financing.
For dividend investors, this stock offers a nice mix of steady income, reasonable valuation, and a solid financial foundation. It’s not the kind of stock that will skyrocket overnight, but it also isn’t one that experiences extreme volatility. With a yield in the mid-3% range and a healthy payout ratio, CZFS fits the bill for investors looking for consistency rather than high-risk, high-reward plays.
Now, let’s take a closer look at the key dividend metrics and what they mean for investors focused on long-term income.
📊 Key Dividend Metrics
🛠 Dividend Yield: 3.35% (Forward) / 3.37% (Trailing)
📈 5-Year Average Dividend Yield: 3.24%
💵 Forward Annual Dividend Rate: $1.96 per share
📅 Dividend Payment Date: December 27, 2024
🚨 Ex-Dividend Date: December 13, 2024
📊 Payout Ratio: 33.42% (Plenty of room for future growth)
Dividend Overview
CZFS currently offers a dividend yield of 3.35%, which is slightly higher than its five-year average of 3.24%. This suggests that the yield is steady and not artificially inflated due to any recent selloffs.
A mid-3% yield might not be the highest in the banking sector, but it’s a solid level, especially when combined with a conservative payout ratio. With only about 33% of its earnings going toward dividends, the company has plenty of breathing room to continue making payments even if business conditions fluctuate.
The company also has a consistent payment history, with dividends scheduled on a regular basis. This reliability is a good sign for long-term investors who prefer to avoid any unpleasant surprises.
Dividend Growth and Safety
Investors who favor dividend stocks tend to look for steady, reliable increases rather than rapid hikes that might not be sustainable. CZFS follows a more measured approach, maintaining slow but consistent growth in its dividend payments.
The payout ratio of 33.42% is particularly reassuring because it leaves room for future increases. Many large banks distribute a much larger percentage of earnings to shareholders, so CZFS is playing it safe. This also means that even if earnings take a temporary hit, the company is unlikely to be forced into cutting its dividend.
Another key factor is volatility. With a beta of just 0.59, CZFS stock moves less than the overall market. That’s great news for income investors who want stability rather than wild price swings.
Chart Analysis
Price Action and Moving Averages
The stock has been on quite a ride over the past year. After a long period of consolidation, it broke out in mid-2024, riding strong momentum that pushed it well above both its 50-day and 200-day moving averages. That rally, however, has cooled off, and the price has been gradually pulling back since peaking in late 2024.
Right now, CZFS is trading just below its 50-day moving average, which has started sloping downward. That suggests some short-term weakness. The 200-day moving average, on the other hand, is still rising, which signals that the longer-term trend remains intact. The key question is whether the stock can stabilize near current levels or if it will slip further toward that 200-day support line.
Volume and Market Participation
Volume tells a big part of the story here. During the initial breakout in the middle of the year, there was a clear spike in buying activity. That kind of surge typically indicates strong institutional interest. Since then, volume has settled back to more typical levels, though there have been occasional bursts of selling pressure.
Most recently, the volume has been relatively muted, suggesting that there’s no overwhelming conviction in either direction right now. That often happens when a stock is trying to find its footing after a pullback. If selling picks up on heavier volume, it could signal further downside. On the flip side, if the stock can hold these levels with light selling pressure, it could be forming a new base.
Relative Strength Index (RSI)
The RSI is hovering in neutral territory, not overbought or oversold. That suggests the stock isn’t at an extreme where a quick reversal would be expected. Instead, it’s in a more wait-and-see phase, where traders and investors are gauging whether the trend will continue downward or find support.
One notable thing about the RSI is that it was clearly in overbought territory back when the stock peaked, which lined up well with the beginning of the pullback. Now that the indicator has come back down to more normal levels, it’s not signaling an immediate buying or selling opportunity, but it does leave room for a move in either direction.
Recent Price Action and Candlestick Patterns
The last five trading sessions have been somewhat choppy, with a mix of up and down days. The wicks on these candles show some intraday volatility, meaning there’s a bit of a tug-of-war happening between buyers and sellers.
The stock did try to push higher but couldn’t sustain the momentum, as shown by the upper wicks on some of the recent candles. That suggests sellers are stepping in when the price moves toward the 50-day moving average. At the same time, the lower wicks on other candles indicate some buying interest when the stock dips closer to $57-$58.
This kind of price action often precedes a bigger move. If buyers regain control, a push back above the 50-day moving average could open the door for a retest of previous highs. But if sellers take over, a drop toward the 200-day moving average wouldn’t be surprising.
Analyst Ratings
📈 Upgrades:
🟢 April 30, 2024 – An analyst from a regional investment firm upgraded CZFS from Hold to Strong Buy. This shift in sentiment came after the bank posted stronger-than-expected quarterly earnings. The analyst pointed to improved asset quality, reflecting a lower rate of non-performing loans, and highlighted management’s success in keeping costs under control. The bank’s expansion into new markets also played a role in the upgrade, as it positioned CZFS for further revenue growth without significantly increasing operational risk.
📉 Downgrades:
🔴 June 29, 2023 – The same firm previously downgraded CZFS from Strong Buy to Hold due to concerns over margin compression. With interest rates showing signs of declining, there was apprehension about the bank’s ability to maintain profitability on new loans. Another factor cited was rising competition in the bank’s key lending markets, which could potentially slow loan growth. Additionally, higher operational costs were flagged as a headwind, particularly in a market where small and mid-sized banks are seeing increased regulatory and technology-related expenses.
💰 Consensus Price Target:
The current consensus price target for CZFS stands at $70, based on analysts’ estimates. This target suggests moderate upside from current levels, factoring in both the company’s strong fundamentals and the near-term pressures it may face. Analyst targets remain fluid, reflecting ongoing economic conditions and the bank’s ability to adapt to changing market dynamics.
Earnings Report Summary
Citizens Financial Services, Inc. wrapped up the fourth quarter of 2024 on a strong note, reporting net income of $7.98 million. That worked out to earnings per share (EPS) of $1.68, a nice bump from the $1.59 EPS recorded in the same period last year. The bank’s net interest income also grew, coming in at $45.75 million for the quarter, compared to $43.51 million a year earlier.
Looking at the full-year numbers, CZFS posted net income of $27.82 million for 2024, a solid jump from $17.81 million in 2023. EPS followed suit, climbing to $5.86 from $4.02. Net interest income was up as well, reaching $86.46 million for the year, compared to $80.26 million the previous year.
These results show steady growth in earnings and revenue, a sign that the bank has been managing its operations efficiently. The increase in net interest income suggests that CZFS has navigated the interest rate environment well, while the strong annual profit growth points to overall stability in its core banking business.
Financial Health and Stability
A strong balance sheet is the backbone of a good dividend stock, and CZFS appears to have its financial house in order.
- Return on Equity (ROE): 9.60% – A solid number that suggests the company is efficiently generating profits.
- Return on Assets (ROA): 0.93% – This is in line with regional banks of similar size.
- Profit Margin: 28.02% – A sign that the company is running an efficient operation.
- Total Cash: $56.39 million – A healthy reserve that adds a layer of security.
- Total Debt: $303.54 million – Some leverage, but normal for a bank that lends as part of its business.
Earnings are also growing, with quarterly earnings up 5.90% year over year. That’s an encouraging sign that profits are keeping up, which should help support dividends in the long run.
Valuation and Stock Performance
At its current price of $58.55, CZFS is trading at a trailing price-to-earnings (P/E) ratio of 10.01 and a forward P/E of 9.27. Compared to the broader banking sector, which typically trades at P/E ratios between 10 and 15, this suggests that the stock is attractively valued.
Looking at other valuation metrics:
- Price-to-Book Ratio: 0.93 – Trading below book value, which often signals an undervalued stock.
- Price-to-Sales Ratio: 2.76 – A reasonable figure for a regional bank.
In terms of performance, CZFS has had an up-and-down year. The stock has traded between $38.52 and $75.40 over the past 52 weeks. The 200-day moving average sits at $56.07, suggesting that the stock has found some stability.
However, it has dipped below its 50-day moving average of $61.58, which might indicate some short-term weakness. That’s not necessarily a concern for dividend investors, though, since long-term income reliability matters more than short-term price action.
Risks and Considerations
Every investment comes with risks, and CZFS is no exception. While the stock looks solid for dividend investors, there are a few factors to keep in mind.
Interest Rate Sensitivity
As a bank, CZFS earns money primarily through interest income. If interest rates decline significantly, it could pressure the company’s profit margins. That could eventually impact earnings and, in extreme cases, dividend growth.
Economic Conditions
Regional banks tend to be more exposed to local economies than large national banks. If Pennsylvania’s economy slows down or unemployment rises, loan defaults could increase, putting pressure on the bank’s financials.
Low Trading Volume
One of the quirks of CZFS stock is that it doesn’t trade very frequently. The average daily volume is just under 13,000 shares, meaning liquidity could be an issue. For investors who might need to sell shares quickly, this is something to consider.
Modest Dividend Growth
While CZFS has a safe dividend, it isn’t known for aggressive dividend hikes. Investors looking for rapid dividend growth may want to set expectations accordingly.
Final Thoughts
Citizens Financial Services, Inc. isn’t a flashy stock, but it does check many of the boxes that dividend investors look for. It offers a steady 3.35% yield, a conservative payout ratio, and solid financials that back up its dividend payments.
With a reasonable valuation and low volatility, CZFS fits well into a portfolio focused on income and stability. While the stock does come with some risks, particularly regarding interest rates and regional economic exposure, its consistent earnings and cautious management approach suggest that it will remain a reliable dividend payer for the long term.
For investors seeking a steady, no-drama income stock, CZFS is worth considering as a long-term holding.
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