Advertisement
U.S. markets closed
  • S&P 500

    5,123.41
    -75.65 (-1.46%)
     
  • Dow 30

    37,983.24
    -475.84 (-1.24%)
     
  • Nasdaq

    16,175.09
    -267.10 (-1.62%)
     
  • Russell 2000

    2,003.17
    -39.43 (-1.93%)
     
  • Crude Oil

    85.45
    +0.43 (+0.51%)
     
  • Gold

    2,360.20
    -12.50 (-0.53%)
     
  • Silver

    27.97
    -0.28 (-0.99%)
     
  • EUR/USD

    1.0646
    -0.0085 (-0.79%)
     
  • 10-Yr Bond

    4.4990
    -0.0770 (-1.68%)
     
  • GBP/USD

    1.2451
    -0.0104 (-0.83%)
     
  • USD/JPY

    153.2400
    +0.0370 (+0.02%)
     
  • Bitcoin USD

    67,470.60
    -3,311.92 (-4.68%)
     
  • CMC Crypto 200

    885.54
    0.00 (0.00%)
     
  • FTSE 100

    7,995.58
    +71.78 (+0.91%)
     
  • Nikkei 225

    39,523.55
    +80.92 (+0.21%)
     

Citigroup (NYSE:C) Has Announced A Dividend Of US$0.51

The board of Citigroup Inc. (NYSE:C) has announced that it will pay a dividend on the 27th of May, with investors receiving US$0.51 per share. This means the annual payment is 4.1% of the current stock price, which is above the average for the industry.

Check out our latest analysis for Citigroup

Citigroup's Payment Has Solid Earnings Coverage

If the payments aren't sustainable, a high yield for a few years won't matter that much. Before making this announcement, Citigroup was easily earning enough to cover the dividend. This means that most of what the business earns is being used to help it grow.

Looking forward, earnings per share is forecast to fall by 37.1% over the next year. Assuming the dividend continues along recent trends, we believe the payout ratio could be 40%, which we are pretty comfortable with and we think is feasible on an earnings basis.

historic-dividend
historic-dividend

Citigroup Has A Solid Track Record

Even over a long history of paying dividends, the company's distributions have been remarkably stable. Since 2012, the first annual payment was US$0.04, compared to the most recent full-year payment of US$2.04. This means that it has been growing its distributions at 48% per annum over that time. It is good to see that there has been strong dividend growth, and that there haven't been any cuts for a long time.

The Dividend Looks Likely To Grow

Some investors will be chomping at the bit to buy some of the company's stock based on its dividend history. It's encouraging to see Citigroup has been growing its earnings per share at 17% a year over the past five years. Citigroup definitely has the potential to grow its dividend in the future with earnings on an uptrend and a low payout ratio.

Citigroup Looks Like A Great Dividend Stock

Overall, we think that this is a great income investment, and we think that maintaining the dividend this year may have been a conservative choice. The distributions are easily covered by earnings, and there is plenty of cash being generated as well. We should point out that the earnings are expected to fall over the next 12 months, which won't be a problem if this doesn't become a trend, but could cause some turbulence in the next year. Taking this all into consideration, this looks like it could be a good dividend opportunity.

Market movements attest to how highly valued a consistent dividend policy is compared to one which is more unpredictable. However, there are other things to consider for investors when analysing stock performance. To that end, Citigroup has 3 warning signs (and 1 which is concerning) we think you should know about. If you are a dividend investor, you might also want to look at our curated list of high yield dividend stocks.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Advertisement