Citigroup Inc. (C), JPMorgan Chase & Co. (JPM), Wells Fargo & Co (WFC): Banking On, Well, Banking

Page 1 of 2

Citigroup Inc (NYSE:C)One of the great turnaround stories that’s still taking shape is Citigroup Inc. (NYSE:C). With all the talk surrounding the mixed results of the housing market and the auto industry in full-fledged rebound mode, much of the spotlight has been taken off the financials. I plan to re-aim this spotlight.

Before the financial crisis, Citigroup Inc. (NYSE:C) traded at a premium to both JPMorgan Chase & Co. (NYSE:JPM) and Bank of America Corp (NYSE:BAC) on a price-to-book basis; now the company trades at a steep discount to JPMorgan Chase & Co. (NYSE:JPM) and inline with Bank of America Corp (NYSE:BAC).



I think Citigroup Inc. (NYSE:C) is still in full turnaround mode and presents investors the best upside of all the major banks. The bank should trade more inline with JPMorgan and other top banks over the long term.

JPMorgan Chase & Co. (NYSE:JPM) is one of the top-three banks by assets. In March, the Fed approved the company’s capital deployment plan. JPMorgan now has a $6 billion stock- repurchase program in place.

JPMorgan Chase & Co. (NYSE:JPM) is also slashing jobs to boost profitability. The bank will eliminate 19,000 jobs by the end of 2014. With the help of job cuts, the bank is calling for net income of $27.5 billion in 2014.

Revenue is expected to be up 2% in 2013, after flat revenue growth in 2012. The top line is expected to be weak due to lower trading revenue. Earlier this month, the bank posted 2Q EPS of $1.60 versus $1.21 for the same period last year. Yet, total loans remained flat year-over-year, with the net interest margin falling. So, the bank is still seeing modest growth, but not enough to justify a premium to Citi.

The mortgage bank

Wells Fargo & Co (NYSE:WFC) is still the U.S.’ leading bank for mortgages. The company got a nice uptick in earnings and loan volume related to mortgage refinancing, but as this market cools, so should Wells Fargo.

Wells Fargo & Co (NYSE:WFC) has a target return on assets of 1.3% to 1.6% and return on equity of 12% to 15%. As well, the bank is looking to international markets to help boost its business model, specifically in the asset management sector.

Page 1 of 2
Comments
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months. Our beta is only 1.2 (don't click this link if beating the market isn't important to you).

Lists

Richest Doctors in the World

The Best Movie Sountracks Ever

The Highest Grossing Musicals on Broadway

The Most Successful Reality TV Stars

Cheapest Cities to Visit in the US

Most Expensive Summer Camps

Most Expensive Animals in the World

Most Expensive Specialty Crops in the World

Movies That Took Ages to Make

The Longest Hollywood Films Ever Made

Most Expensive Concert Stages

The Richest Bands of all Time

10 Most Corrupt Countries 2013 List

10 Countries with the Highest Quality of Life Index

Most Expensive Mattresses in the World

5 Smallest Countries by Land Area

The Ultimate Heartbreak Songs

Richest Teenagers in the World

10 Most Haunted Places in America

10 Best Places to Retire in Florida East Coast

Top 10 Places to See Before You Die

Top 8 Countries in the World Where Justice Prevails

10 Richest States in America

15 Wealthiest Countries in the World

Richest Singers in the World

Most Expensive Tasting Menu in New York City

Most Expensive Baby Items in the World

Most Expensive Hotel Suites in Vegas

Most Expensive Brunch in New York City

Most Expensive Beef Cuts in the World

25 Best Colleges to Get a Job

Top 10 US Supermarkets

The 25 Most Dangerous Cities in the World to Visit

Most Expensive Xbox Games

Top 11 Cities Where Billionaires Live

Top 10 Most Charitable Companies in America

Most Expensive Seafood in the World

The 10 Wildest Conspiracy Theories

The 10 Best Job Markets in the US

Top 10 Accounting Scandals of All Time

The 25 Biggest Cities in the World

Top 10 Best Paying Virtual Jobs

Most Expensive Leather Shoes in the World

Top 6 Things to Buy in March

The 10 Most Stressful Jobs in America – 2014 List

Top 10 Jobs for Introverted People

Top 10 Honeymoon Destinations in the World

Top 10 Highest Paying Jobs in the World

Most Expensive Day-Care in New York City

The 10 Cheapest Places to Retire Abroad

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!