Citigroup does the expected and announced a small buyback

04/25/2013 6:10 pm EST

Focus: STOCKS

Jim Jubak

Founder and Editor, JubakPicks.com

Nothing surprising in today’s announcement from Citigroup (C). After all one reason I added the stock to my Jubak’s Picks portfolio http://jubakpicks.com/ on April 17 was the expectation that the company would announce a significant share buyback program relatively soon.

Today the company’s board of directors voted to continue, as expected, the company’s token 1 cent a share quarterly dividend (payable to shareholders of record as of May 6) and approved the purchase of $1.2 billion in stock through the first quarter of 2014.

The stock repurchase became possible after Citigroup passed the Federal Reserve’s last Comprehensive Capital Analysis and Review (CCAR.) The size of the purchase is roughly enough to offset the dilution created by the company’s annual stock grants so it’s not a major support for the share price. Instead it’s significant as a milestone on the bank’s post-financial crisis journey back to the status of an average bank.

Full disclosure: I don’t own shares of any of the companies mentioned in this post in my personal portfolio. When in 2010 I started the mutual fund I manage, Jubak Global Equity Fund http://jubakfund.com/ , I liquidated all my individual stock holdings and put the money into the fund. The fund did not own positions in Citigroup as of the end of December. For a full list of the stocks in the fund as of the end of December see the fund’s portfolio at http://jubakfund.com/about-the-fund/holdings/

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