Our analysis is based on comparing Citigroup, Inc. with the following peers – Bank of America Corporation, JPMorgan Chase & Co., Deutsche Bank AG, Wells Fargo & Company, U.S. Bancorp, HSBC Holdings plc Sponsored ADR, Morgan Stanley, Mitsubishi UFJ Financial Group, Inc. Sponsored ADR and Barclays PLC Sponsored ADR (BAC-US, JPM-US, DB-US, WFC-US, USB-US, HSBC-US, MS-US, MTU-US and BCS-US).
Citigroup, Inc.’s dividend yield is 0.68 percent and its dividend payout is 6.73 percent. This compares to a peer average dividend yield of 2.10 percent and a payout level of 26.19 percent. This relatively lagging dividend performance could spur some dividend action going forward – as long as the company’s relatively strong dividend quality score of 67 out of a possible score of 100 looks sustainable.
Dividend Quality Overview
- Over the last twelve months (prior to September 30, 2016), C-US paid a medium quality dividend, which represents a yield of 0.50% at the current price.
- Dividend quality trend has not been consistent over the last five years. Dividends were paid during each of these years — of these 1 was high quality, 2 were medium quality and 2 were low quality.
- The ending cash balance, with a dividend coverage of 135.67x, provides a substantial cushion in case of a significant reduction of cash flows in the future.
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Over the last twelve months (prior to September 30, 2016), C-US paid a medium quality dividend.
The source of the company’s cash to support the dividend paid over the last twelve months is operating cash flow (coverage of 25.40x), investing cash flow (coverage of -39.69x), issuance cash flow (coverage of 17.64x) and twelve-month prior cash (coverage of 135.49x), for a total dividend coverage of 136.67x.
C-US‘s issuance cash flow includes outflows from net debt repayment (coverage of -17.36x) and net share buybacks (coverage of -3.10x). Thus, the total coverage including share buybacks is 139.77x, which reflects our assumption that the cash paid for share buybacks is discretionary and could instead be used to pay dividends.
These coverage ratio factors imply that the firm’s net cash inflow from issuance was required (in addition to operating and investment cash) to pay the dividend, which suggests a medium dividend quality.
|Dividend Yield (%)||0.11||0.12||0.08||0.07||0.32||0.68|
|Dividend Payout (%)||0.83||1.64||0.92||1.82||2.96||6.73|
A complete list of metrics and analysis is available on the company page.
Citigroup, Inc. is a global financial services holding company specializes in banking and financial solutions. It offers a range of products and services among individuals, corporations, governments and institutions such as savings, checking, online banking, individual retirements accounts, credit cards; personal, student, and commercial real estate loans, cash management services, home equity, and bill consolidation, as well as online banking services, cash management, transactions, trade, securities, and fund services. It operates through the following segments: Global Consumer Banking, Institutional Clients Group, and Corporate/Other. The Global Consumer Banking segment consists of four geographical consumer banking businesses that provide traditional banking services to retail customers through retail banking, including commercial banking, and Citi-branded cards and Citi retail services. The Institutional Clients Group segment offers corporate, institutional, public sector and high-net-worth clients around the world with a full range of wholesale banking products and services, including fixed income and equity sales and trading, foreign exchange, prime brokerage, derivative services, equity and fixed income research, corporate lending, investment banking and advisory services, private banking, cash management, trade finance and securities services. The Corporate/Other segment refers to administrative functions including finance, risk, human resources, legal and compliance, and others. The company was founded on October 8, 1998 and is headquartered in New York, NY.
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