Top Picks 2019: Citigroup (C)

01/17/2019 5:00 am EST


Jason Clark

Contributing Editor, The Prudent Speculator

Citigroup (C) is a leading global financial institution with approximately 200 million customer accounts and does business in more than 160 countries and jurisdictions, notes Jason Clark, a value investing specialist and contributing editor to The Prudent Speculator.

Citi provides consumers, corporations, governments and institutions with a broad range of financial products and services, including consumer banking and credit, corporate and investment banking, securities brokerage, transaction services and wealth management.

While Citi had a strong 2017, shares were off more than 30% in 2018, despite rising interest rates and increasing profits.

Even though the company faces some operational headwinds in different segments of its business, we continue to see a more focused and recapitalized Citigroup as prepared to reward investors over the long-term.

Additionally, we like that Citi has good leverage towards a still solid U.S. economy, while also having the potential to show outsized benefits versus its peers from growth in Asia, Latin America and other emerging economies. Further, it seems the bank is still on its way to achieving its low-50s efficiency-ratio target by 2020.

Citigroup shares trade at 70% of book value per share and less than 7 times NTM adjusted EPS forecasts, all while offering a dividend yield of 3.6%, while the bank continues to consistently buy back its stock.

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