Citigroup Inc.(C) is a $136.11 billion market cap global financial services company. C provides consumers, corporations, governments and institutions with a range of financial products and services. The company operates through two segments, Citicorp and Citi Holdings. The Citicorp segment operates as a global bank for businesses and consumers with two primary businesses, Regional Consumer Banking and Institutional Clients Group.
Not long ago C went from a sub $6 stock to a $40+ stock by using the magic of a 1-for-10 reverse stock split. The company is not worth any more than it was before, but for anyone who has left the planet Earth and just came back, it does give the appearance of a company that is doing well. One of the apparent goals of having a dividend is to gain attraction from investors who will buy a stock because it has a dividend. It will be interesting to see how it plays out for investors. According to Reuters, C declared its first dividend in more than two years, announcing it will pay $0.01 per share on June 17. Click to enlarge
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The company was founded in 1812, and is based in New York, N.Y. Citigroup reported $0.1 per share in earnings for the quarter ending 3/31/2011. The next reporting quarter estimated mean earnings are $1.03 per share. Analyst estimates range between $0.8 and $1.3 per share. The current trailing twelve months (ttm) P/E ratio is 13.863 and the forward P/E ratio is 7.72. C has a price to book ratio (ttm) of 0.86 and a price to sales ratio of 2.55. The annual growth rate of the revenue is really exciting at a rate of 0.5505%. The current dividend as a percentage of the trailing twelve months income is 0.0009% (see graph below). For the trailing twelve months investors received $0 for a yield of 0.00%. Based on the current price at the time of this writing and the current increased payout of $0.01, C now has a yield of 0.1% Like all my swing- to longer- term trades, the last thing I think is important to look at is what options have the highest volume and offer the best opportunity.
If everything else matches up as needed, an investor could short put options expiring in July at a strike price of $40, for a price of $1.20 or better. Shorting a put option will have a lower risk than buying the stock outright.
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Beyond the aforementioned numbers, which look ok, investors should consider other key figures. C has rising revenue year-over-year (yoy) of $55.06 billion for 2010, vs. $35.51 billion for 2009. Additionally, a bottom line number trend giving the impression of a management executing the business plan well. C's bottom line has rising earnings yoy of $10.6 billion for 2010, vs. $-1606 million for 2009. I use a proprietary blend of technical analysis, financial crowd behavior, and fundamentals in my short-term trades, and while not totally the same in longer swing trades to investments, the concepts used are similar. Based on my criteria, I have come to the following conclusion: I will be looking for an ideal entry price to either write put options or buy the stock.
Of course that in itself does not mean you should, but you may want to use this article as a starting point for your own research with your financial planner. I use Seeking Alpha, Edgar Online, Goggle Finance, MSN Money, cnbc.com, Zacks and Yahoo Finance for most of my data and may or may not double check it with the SEC filings.
Disclosure: I have no positions in any stocks mentioned, but may initiate a long position in C over the next 72 hours.