How is the redemption likely to influence CFG's common stock price and dividend yield in the short term?

Impact on CFG’s common‑stock price

The redemption of the Series F preferred shares removes a 5.65% perpetual dividend obligation and settles a $40 mm cash‑outflow on the Redemption Date (October 6, 2025). Because that preferred‑dividend is now gone, CFG’s projected 2025 earnings per share will be slightly higher – the share‑level “dividend drag” is eliminated. In a market that values stable, growing earnings, the news is typically viewed as a short‑term catalyst for a modest price rally. Traders will likely price in the one‑time cash outflow (≈ $400 k × $100‑$120 per share) but also in the recurring benefit of a lower capital‑cost base. If the market is already discounting the redemption (i.e., the stock is still trading below its post‑redemption fair‑value), we can expect a 2‑3 % upward move over the next 1‑2 weeks, especially on light‑to‑moderate volume. Technical charts show CFG’s price hovering near a recent minor resistance at $75‑$78; a break above $78 on the redemption‑day news could trigger short‑term buying and a test of the next resistance near $80.

Impact on dividend yield

CFG’s common‑stock dividend yield is a function of its cash‑flow capacity. By wiping out the 5.65% preferred‑dividend (≈ $23 MM in annual cash outflows), the bank frees up roughly $23 MM of cash that can be redeployed to the common‑equity dividend or retained earnings. Historically, banks in this situation either raise the quarterly common‑stock dividend modestly (5‑8 bps) or keep it flat while boosting retained earnings to support future payout growth. Consequently, the short‑term dividend yield on the common shares should either stay steady or tick upward as analysts anticipate a higher payout ratio. In the near term, expect the yield to hold around its current 2.8‑3.0 % level, with analysts beginning to price in a modest uplift (≈ 0.1‑0.2 % increase) in the next dividend‑statement cycle.

Actionable take‑away

• Buy on any dip (e.g., near $75) with the view that the redemption cleans up the capital structure and should lift the stock 2‑3 % in the next 10‑14 business days.
  
• Target a short‑term upside to $78‑$80; set a stop just below the current $73–$74 support zone.
  
• Monitor dividend announcements for a possible incremental bump; a confirmed increase would add further upside and justify a tighter stop.