Citigroup Stock in Focus Ahead of Earnings Next Week

C currently has all the qualities of a great value stock for potential investors

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Citigroup Inc. (NYSE:C) is one of the "Big Four" banks of the United States, alongside JPMorgan Chase (JPM), Bank of America (BAC), and Wells Fargo (WFC).

If there's one consistency to earnings seasons recently, its that banks are always the leadoff hitter. Citigroup joins JPMorgan Chase, Wells Fargo, and PNC Financial (PNC) in the group of financial institutions set to report earnings next week before the open on January 15. Citigroup stock beat expectations in a clean sweep of all four earnings reports released last year. However, only in January did C score a positive post-earnings reaction. After the last eight reports, regardless of direction, the bank stock has averaged a timid move of 2.3%. This time around, the options market is pricing in a much larger move of 5.7%.

Citigroup also has a forward dividend of $2.04 and a forward dividend yield of 3.31%. C’s last dividend was for $0.51 per share. The company has paid a dividend since 1986.

Citigroup stock closed yesterday's session at its highest point since early March. And while the shares remain well off their Jan. 14 annual high of $89.11, their 10-day moving average has emerged as short-term support since an early November bull gap. 

C Stock Chart

Citigroup stock trades at a price-earnings ratio of 12.71 and has a forward price-earnings ratio of 10.36. In addition, Citigroup has added over $4 billion to its already massive revenue total, and the company did so in just the past three years. The company's total revenue stands at $76.4 billion over the past 12 months.

From a fundamental point of view, the biggest red flag for Citigroup stock is its inconsistent net income growth. Nonetheless, the company has done well to recover from the $6.687 billion in net losses posted in 2017. Citigroup has generated over $17 billion in net profit this past year. Furthermore, the company has an impressive balance sheet. Despite its seemingly-high $578 billion in debt, Citigroup holds an even higher $946 billion in cash.

Overall, it's reasonable to deduce that Citigroup is a solid value play at this time and will most likely yield some very nice returns from stock growth and dividends over the coming years.


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