Having some sort of financial exposure is important because there can be growth when the interest rates and economy start to grow, but when the market slows, banks are typically quick to feel the effects. Comparing back to pre-recession levels, you can see that the stock has yet to recover and this could alarm investors because if another market slow down were to occur, they may be wondering if their investment would recover
Typically, a company's
financial statements are the reports that show the
financial position of the company. There are three main documents that fall into the category of financial statements. These documents include Citigroup income statement, its balance sheet, and the statement of cash flows. Potential Citigroup investors and stakeholders use financial statements to determine how well the company is positioned to perform in the future. Although Citigroup investors may use each financial statement separately, they are all related. The changes in Citigroup's assets and liabilities, for example, are also reflected in the revenues and expenses that we see on Citigroup's income statement, which results in the company's gains or losses. Cash flows can provide more information regarding cash listed on a balance sheet, but not equivalent to net income shown on the income statement. Please read more on our
technical analysis and
fundamental analysis pages.
The goal of Citigroup
fundamental analysis is to do accurate financial forecasts. There are several possible objectives to fundamental analysis, such as projecting of Citigroup performance into the future periods or doing a reasonable stock valuation. The intrinsic value of Citigroup shares is the value that is considered the true value of the share. If
the intrinsic value of Citigroup is higher than its market price, buying is generally recommended. If it is equal to the market price, it is recommended to hold; and if it is less than the market price, then one should sell all shares Citigroup. Please read more on our
fundamental analysis page.
How effective is Citigroup in utilizing its assets?
Citigroup reports assets on its Balance Sheet. It represents the amount of Citigroup resources that either has an existing economic value or will provide some form of benefits in the future. By effectively utilizing its assets, Citigroup aims to generate revenue, control costs, drive operational efficiency, and enhance profitability. Optimizing asset utilization helps maximize shareholder value and maintain a competitive position in the Diversified Banks space. To get a better handle on how balance sheet or income statements item affect Citigroup volatility, please check the breakdown of all its
fundamentals.
Are Citigroup Earnings Expected to grow?
The
future earnings power of Citigroup involves the interaction of many company-specific, industry, and economic forces. Earnings estimates embody investors' opinions of Citigroup factors such as sales growth, product demand, competitive industry environment, profit margins, and cost controls. Citigroup
stock prices adjust as these expectations change or are proven wrong. The main thing to remember is that equities with high expected earnings growth tend to underperform the market because it is usually difficult to meet the market's high expectations. Companies with low earnings expectations tend to do better than expected. Please use our latest analysis of Citigroup
expected earnings.
And What about dividends?
A dividend is the distribution of a portion of Citigroup earnings, decided and managed by the company's board of directors and paid to a class of its shareholders. Note, announcements of dividend payouts are generally accompanied by a proportional increase or decrease in a company's stock price. Citigroup dividend payments follow a chronological order of events, and the associated dates are important to determine the shareholders who qualify for receiving the dividend payment. Citigroup one year expected dividend income is about USD1.55 per share.
At present, Citigroup's
Dividend Payout Ratio is projected to increase slightly based on the last few years of reporting.
Investing in dividend-paying stocks, such as Citigroup is one of the few strategies that are good for long-term investment. Ex-dividend dates are significant because investors in Citigroup must own a stock before its ex-dividend date to receive its next dividend.
This type of analysis is very useful when you want to generate a past dividend schedule and payout information for Citigroup. Then that information in the form of graph and calendar can be used to fully explain how Du Pont dividends can provide a real clue to its valuation.
Is Citigroup valued correctly by the market?
Taking a look at the stock chart using the monthly time frame, you can see that the stock has increased since the initial fall off in 2008, but it is still climbing to the previous highs. The financial sector is once place where you should certainly compare the companies because some may provide better value. You should also watch for new regulations that could affect the way Citigroup conducts business as that can translate into expenses and hurt cash flow.
With a rising interest rate environment, banks should see a benefit to this because they can begin to charge a higher interest rate for lending money, which means they will return more overall. Also, people who store their funds in a money market account or in a interest savings account, they should begin to slowly see an increase on their interest revenue.
Be sure to keep in mind the risks of investing in the finance sector. One risk to keep in mind is that they are sensitive to the overall market conditions, more so than other sectors. Secondly, keep an eye on the global financial health because while the U.S. is doing well, a slowing Europe may affect our health indirectly. Lastly, make sure the health of the financial institution is well because you want the company to withstand a market slow down well, and not end up bankrupt.
Luckily there are many options within the financial space and you should take your time to get to know not only Citigroup, but others as well. If you want to get the exposure but eliminate the company specific risk, look at ETF products that cover this area. See how much risk you can handle and if your portfolio is ready for another addition. If you find yourself stuck, reach out to an investing professional and they can help to point you in the right direction.
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Nathan Young is a Senior Member of Macroaxis Editorial Board - US Equity Analysis. With years of experience in the financial sector, Nathan brings a diverse base of knowledge. Specifically, he has in-depth understanding of application of technical and fundamental analysis across different equity instruments. Utilizing SEC filings and technical indicators, Nathan provides a reputable analysis of companies trading in the United States.
View Profile This story should be regarded as informational only and should not be considered a solicitation to sell or buy any financial products. Macroaxis does not express any opinion as to the present or future value of any investments referred to in this post. This post may not be reproduced without the consent of Macroaxis LLC. Macroaxis LLC and Nathan Young do not own shares of Citigroup. Please refer to our
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