Cullen/Frost Bankers: 9 Critical Numbers

Given that you clicked on this article, it seems safe to assume you either own stock in Cullen/Frost Bankers (NYSE: CFR  ) or are considering buying shares in the near future. If so, then you've come to the right place. The table below reveals the nine most critical numbers that investors need to know about Cullen/Frost stock before deciding whether to buy, sell, or hold it.

But before getting to that, a brief introduction is in order. Founded in 1868, Cullen/Frost provides banking, investment, and insurance services to businesses and individuals in multiple cities throughout Texas. With $23 billion in assets on its balance sheet, it's one of the nation's largest lenders, ranking between Wisconsin's Associated Banc-Corp and Northern California's SVB Financial (the holding company for Silicon Valley Bank).

As you can see in the table above, from a shareholder's perspective, Cullen/Frost outperforms the industry in a multitude of metrics. First and foremost, its nonperforming loans ratio is roughly half the average of the 100-plus banks I examined for the current article series. This demonstrates a prudent approach to credit-risk management. It's been able to accomplish this, moreover, without giving up too much on the net interest margin side -- as interest rate spreads and credit risk are, almost by definition, correlated.

Beyond this, Cullen/Frost generates a respectively one-third of its income from fee-revenue -- this helps to serve as a hedge against extended periods of low interest rates. And it pays out roughly half of its net income in dividends -- rewarding shareholders for their investment while simultaneously tempering acquisitive inclinations on the part of management.

With this in mind, it should be no surprise that the biggest downside to purchasing Cullen/Frost shares concerns valuation. Trading at more than 2 times tangible book value for the reasons just discussed, they are far from cheap.

Many investors are scared about investing in big banking stocks after the crash, but the sector has one notable stand-out. In a sea of mismanaged and dangerous peers, it rises above as "The Only Big Bank Built to Last." You can uncover the top pick that Warren Buffett loves in The Motley Fool's new report. It's free, so click here to access it now.


Read/Post Comments (0) | Recommend This Article (1)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2374033, ~/Articles/ArticleHandler.aspx, 12/21/2014 3:40:00 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement