Cullen/Frost Bankers, Inc. (CFR): A Bull Case Theory

We came across a bullish thesis on Cullen/Frost Bankers, Inc. (CFR) on Substack by Serhio MaxDividends. In this article, we will summarize the bulls’ thesis on CFR. Cullen/Frost Bankers, Inc. (CFR)’s share was trading at $122.39 as of May 6^th. CFR’s trailing and forward P/E were 13.43 and 13.64 respectively according to Yahoo Finance.

A bustling financial district street corner with a regional bank branch in the foreground.

Cullen/Frost Bankers (CFR), a Texas-based regional bank with $52 billion in assets, continues to demonstrate stability and shareholder commitment, recently announcing a 5.3% dividend increase to $1.00 per share—marking its 33rd consecutive year of dividend growth. The new payout is scheduled for June 13 to shareholders of record on May 30. Q1 2025 earnings were strong, with net income rising to $149.3 million ($2.30 EPS), up from $134 million the year prior. Revenue climbed 7.2% year-over-year to $560.4 million, driven by a 6.1% increase in net interest income, reaching $436.4 million. Loan balances expanded 8.8% to $20.8 billion, while deposits grew 2.3% to $41.7 billion. Credit metrics remain solid, with net charge-offs at $9.7 million and nonaccrual loans totaling $83.5 million. The bank also boasts robust capital ratios, with a CET1 of 13.84% and Tier 1 at 14.30%, underscoring financial strength. Strategically, Cullen/Frost continues to grow its footprint across Texas, now nearing its 200th branch—up from 130 in 2018—solidifying its position as a leading regional player. With its strong fundamentals, consistent dividend growth, and ongoing expansion, analysts remain bullish, with Bank of America recently raising its price target to $145, signaling continued confidence in CFR’s long-term trajectory.

Cullen/Frost Bankers, Inc. (CFR) is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 17 hedge fund portfolios held CFR at the end of the fourth quarter which was 18 in the previous quarter. While we acknowledge the risk and potential of CFR as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than CFR but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

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Disclosure: None. This article was originally published at Insider Monkey.