Fact based stock research
Cullen/Frost (NYSE:CFR)

US2298991090

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For every stock, we judge its performance against its peers and rank it on a scale of 1 to 100. The higher the rank, the better the stock performs than its peers. And, we do this for six investment strategies:
Value - shows how good of a value the stock is. Green is "inexpensive"; red is "expensive".

Growth - shows a company's growth potential. Green is "high growth" expected; red is "tough times ahead".

Safety - relates to the amount of debt a company has. Green is low debt level; red is high debt level.

Combined Financial - this isn't an average of the first three ranks but rather a consolidated view across several financial indicators. Green = good; red = tread carefully.

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Cullen/Frost stock research in summary

frostbank.com

ANALYSIS: With an Obermatt Combined Rank of 6 (worse than 94% compared with investment alternatives), Cullen/Frost (Regional Banks, USA) shares have lower financial characteristics compared with similar stocks. Shares of Cullen/Frost are low in value (priced high) with a consolidated Value Rank of 5 (worse than 95% of alternatives), and are riskily financed (Safety Rank of 33, which means above-average debt burdens) but show above-average growth (Growth Rank of 51). ...read more

RECOMMENDATION: A Combined Rank of 6, is a sell recommendation based on Cullen/Frost's financial characteristics. As the company Cullen/Frost shows low value with an Obermatt Value Rank of 5 (95% of comparable investments are less expensive), investors should look at the other ranks. In this case, growth is expected to be above-average, better than 51% of comparable companies (Obermatt Growth Rank is 51). This is a typical case. Companies with above average growth tend to cost more than stocks with slower growth expectations. If this is a high-growth company, the low Obermatt Safety Rank of 33 is a good sign. The more debt a well-performing company has, the higher the returns to shareholders. However, if growth turns negative or interest rates increase, high debt may become a burden. If you believe the future is bright for Cullen/Frost, even a low-value company (in terms of its key financial indicators) can be a good investment. Obermatt Premium subscribers can further check the stock’s Sentiment Ranks, which also flow into the Obermatt 360° View for investors. ...read more

Latest Obermatt Ranks


360° View^new
Sentiment Rank^new
Value Rank	5
Growth Rank	51
Safety Rank	33
Combined Rank	6

Country	USA
Industry	Regional Banks
Index	D.J. US Banks, S&P MIDCAP
Size class	Large

19-Dec-2024. Stock data may be delayed. Log in or sign up to get the most recent research.

Further information

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Review the performance ranks of the individual metrics that form each investment strategy.

Research History: Cullen/Frost

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	17	7	23	5
GROWTH
GROWTH	28	63	25	51
SAFETY
SAFETY	98	41	47	33
SENTIMENT
SENTIMENT	n/a	1	49	^new
360° VIEW
360° VIEW	n/a	3	15	^new

Most recent update of the stock research: 19-Dec-2024. Financial reporting date used for calculating ranks: 30-Sep-2024. Stock research history is based on the Obermatt Method. The higher the rank, the better Cullen/Frost is in the corresponding investment strategy.
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Combined financial peformance in Detail

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	17	7	23	5
GROWTH
GROWTH	28	63	25	51
SAFETY
SAFETY	98	41	47	33
COMBINED
COMBINED	40	16	9	6

Last update of combined financial performance: 19-Dec-2024. Stock analysis on combined financial performance: The higher the rank of Cullen/Frost the better the performance.

Value Metrics in Detail

ANALYSIS: With an Obermatt Value Rank of 5 (worse than 95% compared with alternatives), Cullen/Frost shares are significantly more expensive than comparable stocks. The Value Rank is based on consolidating four value indicators, with all four indicators below average for Cullen/Frost. Price-to-Sales is 16 which means that the stock price compared with what market professionals expect for future profits is higher than 84% of comparable companies, indicating a low value concerning Cullen/Frost's sales levels. Price-to-Book Capital (also referred to as market-to-book ratio) also has a low Price-to-Book Rank of 5, which means that both reliable company size indicators, sales, and invested capital cannot explain the high stock price of Cullen/Frost. In addition, the two profit-related value indicators, Price-to-Profit (also referred to as price-earnings, P/E) with a low rank of 13 and Dividend Yield, which is lower than 53% of comparable companies, also make the stock more expensive compared with investment alternatives. ...read more

RECOMMENDATION: The overall picture with a consolidated Value Rank of 5, is a sell recommendation based on Cullen/Frost's stock price compared with the company's operational size and dividend yields. How can market participants pay such a high price for Cullen/Frost? One reason may be that the company is simply too popular. If enough people want a particular stock, its price can exceed reasonable levels. This is often the case for companies offering new and exciting products and everybody wants a piece of the action. Should you pay a lot for a hot stock such as Cullen/Frost? It's risky, and even if the stock price continues to grow because of popular demand, it may return to more typical lower levels later. And that return can be sudden and quick, making it impossible for retail investors to exit on time. Sometimes, high prices are deserved. This is the case when it is justified to believe that the company will dominate a market with high profit margins. It has happened in the past for many technology companies and indeed for commercially successful pharmaceutical discoveries. Sometimes they last, sometimes, they get eaten alive. Cullen/Frost may be such a type of stock. That would mean, retail investors should be careful, only considering investing a small part of their wealth in this exciting category and always being ready to lose more than half, if not all of the investment. We recommend further analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks, including the 360° View, before making an investment decision, which is essential in this case, as the financial indicators are inconclusive. ...read more

VALUE METRICS	2021	2022	2023	2024
PRICE VS. REVENUES (P/S)
PRICE VS. REVENUES (P/S)	13	9	31	16
PRICE VS. PROFITS (P/E)
PRICE VS. PROFITS (P/E)	18	3	43	13
PRICE VS. CAPITAL (Market-to-Book)
PRICE VS. CAPITAL (Market-to-Book)	20	9	5	5
DIVIDEND YIELD
DIVIDEND YIELD	59	31	57	47
CONSOLIDATED RANK: VALUE
CONSOLIDATED RANK: VALUE	17	7	23	5

Last update of Value Rank: 19-Dec-2024. Stock analysis on value ratios: The higher the rank, the lower the value ratio of Cullen/Frost; except for dividend yield where the rank is higher, the higher the yield.

Growth Metrics in Detail

ANALYSIS: With an Obermatt Growth Rank of 51 (better than 51% compared with alternatives), Cullen/Frost shows an above-average growth dynamic in its industry. Investors also speak of positive momentum. The Growth Rank is based on consolidating four value indicators, with half of the indicators below and half above average for Cullen/Frost. Capital Growth has a rank of 85, which means that currently professionals expect the company to grow its invested capital more than 41% of its competitors. Investors welcomed this, visible in the Stock Returns rank of 65 (above 65% of alternative investments). But Sales Growth has only a rank of 16, which means that, currently, professionals expect the company to grow less than 84% of its competitors, and Profit Growth is also low at a rank of 41. ...read more

RECOMMENDATION: The overall picture with a consolidated Growth Rank of 51, is a buy recommendation for growth and momentum investors. This is an ambiguous picture. Revenue growth and capital growth are strong, but the growth in profit, which seems good, can also be an indication that growth momentum may be negative. The fact that stock returns have been above average doesn't help much, as stock returns are less reliable in showing a company’s future growth potential. Prices may perform well for the simple reason that investors were too pessimistic in the past and are now correcting their opinions and moving the stock price to a more reasonable level. As the growth picture is mixed for Cullen/Frost, investors may want to look at value and sentiment indicators for a well-rounded picture of this stock. While momentum is a popular investment factor, the value aspect might be the more important one, in the longer term. We recommend analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks to arrive at a 360° View of the stock purchase case, especially since the growth performance is mixed here. ...read more

GROWTH METRICS	2021	2022	2023	2024
REVENUE GROWTH
REVENUE GROWTH	20	22	63	16
PROFIT GROWTH
PROFIT GROWTH	42	43	85	41
CAPITAL GROWTH
CAPITAL GROWTH	n/a	63	4	85
STOCK RETURNS
STOCK RETURNS	59	91	9	65
CONSOLIDATED RANK: GROWTH
CONSOLIDATED RANK: GROWTH	28	63	25	51

Last update of Growth Rank: 19-Dec-2024. Stock analysis on growth metrics: The higher the rank, the higher the growth and returns of Cullen/Frost.

Safety Metrics in Detail

ANALYSIS: With an Obermatt Safety Rank of 33 (better than 33% compared with alternatives), the company Cullen/Frost has financing practices on the riskier side, which means that their overall debt burden is above the industry average. This doesn't mean that the business of Cullen/Frost is also risky, it only means that the company is on the riskier side in respect to bankruptcy in case things turn sour, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, with just one indicator above average for Cullen/Frost. Liquidity is at 81, meaning the company generates more profit to service its debt than 81% of its competitors. This indicates that the company is safer when it comes to debt service. But Refinancing is riskier at a rank of 34, which means that the portion of the debt that is about to be refinanced is above average. It has more debt in the refinancing stage than 66% of its competitors. Leverage is also high at a rank of 18, which means that the company has an above-average debt-to-equity ratio. It has more debt than 82% of its competitors. ...read more

RECOMMENDATION: With a consolidated Safety Rank of 33 (worse than 67% compared with alternatives), Cullen/Frost has a financing structure that is riskier than that of its competitors. High Leverage (a low Obermatt Leverage Rank) is good in good times, because it usually indicates that shareholders get higher returns. The good Liquidity performance of the company is an indicator that this is the case. However, if you expect an economic downturn, you may stay clear of this stock because they have an above-average debt level that needs refinancing soon. If the company is sailing with good winds, as may be visible from the Growth and Sentiment performance, the refinancing risk may be lower than the low Refinancing rank suggests. ...read more

SAFETY METRICS	2021	2022	2023	2024
LEVERAGE
LEVERAGE	90	20	20	18
REFINANCING
REFINANCING	67	48	37	34
LIQUIDITY
LIQUIDITY	85	73	86	81
CONSOLIDATED RANK: SAFETY
CONSOLIDATED RANK: SAFETY	98	41	47	33

Last update of Safety Rank: 19-Dec-2024. Stock analysis on safety metrics: The higher the rank, the lower the leverage of Cullen/Frost and the more cash is available to service its debt.

Sentiment Metrics in Detail

SENTIMENT	2021	2022	2023	2024
ANALYST OPINIONS
ANALYST OPINIONS	n/a	3	54	^new
OPINIONS CHANGE
OPINIONS CHANGE	n/a	26	56	^new
PRO HOLDINGS
PRO HOLDINGS	n/a	74	19	^new
MARKET PULSE
MARKET PULSE	n/a	4	68	^new
CONSOLIDATED RANK: SENTIMENT
CONSOLIDATED RANK: SENTIMENT	n/a	1	49	^new

Last update of Sentiment Rank: 19-Dec-2024. Stock analysis on sentiment metrics: The higher the rank, the more positive the sentiment for Cullen/Frost.
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