Since Donald Trump's victory, banking stocks have been on a rally. Expectations of lesser regulations and an improving interest-rate environment along with the strengthening of domestic economy have created further optimism.
One of the stocks displaying healthy prospects is Citigroup Inc. C. Its diverse business model, solid capital position and strategic investments make it a good investment option now. Also, based on its strong fundamentals, we believe Citigroup has plenty of upside potential.
Citigroup’s shares returned 39.8% over the last year, compared with 38.6% gain recorded by the Banks – Major Regional industry. Thus, Citigroup carries a Zacks Rank #2 (Buy).
Here is why Citigroup stock seems worth buying:
Earnings Per Share Growth: Over the past three to five years, Citigroup witnessed earnings per share (EPS) growth of 9.35%. Notably, the company also recorded an average positive earnings surprise of 7.74%, over the trailing four quarters.
Also, the projected EPS growth of Citigroup for one year is 9.40% which compares favorably with the industry average growth of 8.56%.
Growth in Core Business: Citigroup has been taken steps for growth by reducing expenses and streamlining its operations. The company has been lowering its branches, improving digital channels and also making investments in several areas in order to improve efficiency and profits.
Impressive Capital Deployment: The company declared a solid hike of 68.8% in its common stock dividend in Jul 2016. Also, it has a share repurchase program in place. These activities reflect its capital strength and commitment towards rewarding the shareholders.
Stock Seems Undervalued: Citigroup has a P/B ratio of 0.78x compared with the broader industry’s average of 1.37x. Based on this ratio, the stock seems undervalued. Also, the company has a Value Score B, which makes it a good pick for value investors.
Other Stocks Worth a Look
Some other stocks worth considering in this space include KB Financial Group Inc. KB, Two River Bancorp TRCB and DBS Group Holdings Ltd. DBSDY. All these stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here..
KB Financial witnessed an upward earnings estimate revision of 2.9% for the current year in the past 60 days. Also, its share price surged 59.7% in the last one year.
Two River Bancorp’s earnings estimates have been revised upward by 5.6% for the current year, in the past 60 days. Further, in the last one year, its share price gained 95.4%.
DBS Group witnessed a 4.0% upward earnings estimate revision over the last 30 days. Its shares increased 18.4%, over the last year.
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Citigroup Inc. (C): Free Stock Analysis Report
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