Should I Buy City Group (C)? Finance YouTuber Analysis

The analyst notes that while City Group trades at a steep discount to peers like JP Morgan on a price-to-book basis, this is a persistent valuation trend due to lower capital returns and other fundamentals. He argues that for the stock to be a good investment, there would need to be a general increase in bank investor sentiment, an improvement in its own operations, or a change in investor valuation perception, none of which are guaranteed.

“City Group always trades at this lower valuation that means even though Shares are cheaper compared to its peers compared to JP Morgan and others it doesn't mean the stock is going to pop up to that 1.7 times valuation anytime soon”

Citigroup is highlighted as a value play with a strong 16% earnings yield and a 4.6% cash return. Despite regional bank crises, big banks like Citigroup are performing well, with growing net interest income and deposits. The stock trades at a significant discount to its tangible book value per share (0.53 times), indicating it's deep in value territory and not in danger due to its liquidity resources.

“and that gives us a strong 16 earnings yields for Citigroup but you also get that 4.6 percent cash return just for holding the shares”

The YouTuber identifies Citigroup as a value play, noting its position as the third-largest bank in the US and its strong financial health despite regional bank crises. The stock trades at a significant discount to its tangible book value (0.53x) and offers a 16% earnings yield along with a 4.6% dividend yield, making it an attractive investment despite lower returns on tangible equity compared to peers.

“Citigroup is the third largest bank in the United States with over a trillion dollars in U.S assets and 1.7 trillion globally and despite the crisis at Regional Banks big banks have been doing pretty well net interest income and deposits both grew by more than 2 percent on a year-over-year basis and deposits increased through that first quarter now this chart is a little busy but offers a lot of great information including balance sheet metrics at the bottom the bank recorded just 264 billion in held to maturity Securities in the first quarter now that's the line item destroying the regional Banks because that fear is that the bond portfolio isn't worth nearly as much as is reported but with just 264 billion here and liquid resources of more than a trillion dollars the bank is in no danger we also see that tangible book value per share of 84 which means at a share price of just 45 each the stock is trading for just 0.53 times Book value deep into value territory”

Hogue recommends Citigroup due to the improving net interest margin for banks, which is expected to reach 1980s levels of profitability. The company trades at a significant discount to its book value and long-term average, and strong capital requirements suggest substantial shareholder returns. A re-rating to 0.75 times book value could lead to a 56% return.

“so City Group trades for a Price to Book value of 0.55 times that's a 25 discount to its own long-term average and well under the industry average for banks a re-rating back to 0.75 times Book value and strength in lending once the economy starts growing again could take these shares back to 80 each for a 56 return”

The YouTuber recommends Citigroup, citing the improving net interest margins for banks as interest rates rise, which is expected to boost profitability. He notes the industry's strong capital requirements and the bank's low valuation at 0.48 times book value, along with a 4.6% dividend yield, making it an attractive investment for a rebound.

“shares of Citigroup trade for just 0.48 times Book value that's about the lowest in the industry and the stock pays a 4.6 dividend while you wait for this one”

The YouTuber identifies Citigroup as the single best value stock to own, citing its extremely low P/E ratio and trading significantly below book value compared to peers and its own historical average. He highlights the improving net interest margin for banks and strong capital requirements, suggesting a significant upside potential despite slightly lower profitability metrics than some rivals.

“and the best value stock one i own in my own account as well as our bow tie nation portfolio shares of citigroup ticker c on its 5.5 times p e ratio and a dividend yield over four percent”

The analyst recommends Citigroup, highlighting its exceptionally cheap valuation at 0.5 times price-to-book value, the lowest in a decade among bank stocks. Similar to JPMorgan, the expected 41% earnings drop is attributed to increased loan loss reserves. With revenue still growing and a strong consumer, these reserves are likely to be released, significantly boosting future earnings. Bank stocks are expected to lead the next bull market.

“Shares are now trading for an exceptionally cheap 0.5 times on a price to book value okay that's 0.5 half of its book value for this for this company lowest in a decade among the lowest in bank stocks you know bank stocks are going to be the first to rebound in the next bull market.”

The YouTuber highlights Citigroup's current valuation at 0.54 times price-to-book, which is its lowest in over a decade and about half its usual trading multiple. He notes the company pays a 4.2% dividend yield, making it an attractive value play even if an immediate rebound doesn't occur. This is part of a broader bullish thesis on bank stocks.

“citigroup trades for just .54 times on a price to book value that's the lowest valuation in more than a decade about half of what this stock usually trades for so it pays a 4.2 dividend yield right so you know even if it doesn't rebound immediately you're gonna get that four percent plus dividend yield and this is this is in value territory”

The YouTuber owns Citigroup, highlighting its extremely low valuation at just 0.5 times price-to-book, which is 32% below its five-year average and makes it the cheapest bank stock. He believes the ongoing sale of non-performing consumer units will improve profitability and drive the multiple higher, offering significant upside potential.

“The real story here and this is why I own the shares is the valuation Citigroup trades for just 0.5 times on that price to book value and that's really the measure you want to use with these banks.”

The analyst recommends Citigroup due to its strong dividend growth, low valuation compared to peers (0.59x price-to-book), and catalysts from rising interest rates and increased credit card balances. He projects a 35% return from valuation normalization on top of the dividend.

“With Citigroup, not only do you get that strong dividend growth, but it's also one of the lowest valuation stocks in my favorite industry right now.”

The YouTuber is bullish on Citigroup, noting its strong performance in their portfolio and the favorable outlook for banks. With consumer loan demand returning and interest rates rising, banks are poised for increased profitability. Citigroup is considered cheap, trading at just 0.7 times price-to-book value, and analysts project over 22% upside to $78.61 per share.

“more than 3 500 investors checked out shares of citigroup ticker c over the last year and 260 are watching the stock”

The analyst suggests buying Citigroup if its stock price falls below $70 per share. Despite flat revenue and book value growth, the bank's net income growth and current price-to-book value ratio, combined with conservative growth assumptions, project a 15% internal rate of return, which is 50% above the market average. The analyst acknowledges risks related to revenue and book value growth but sees it as a good risk-return ratio for a mega-cap bank.

“if it does come down for some reason if interest rates move and the stock price fall i think cities city group is a good buy certainly less than 70 a share i'd be looking into”