We recently published a list of Starter Stock Portfolio 12 Safe Stocks to Buy. In this article, we are going to take a look at where Citigroup Inc. (NYSE:C) stands against other best beginner stocks.
The US stock market has experienced a turbulent first quarter of 2025, marked by increased volatility and negative returns across the major indices. Concerns surrounding tariffs, economic data, and the performance of key technology stocks contributed to this challenging period for investors.
The year began with the revelation of DeepSeek, an Artificial Intelligence (AI) software developed in China, which rivalled its US competitors, such as ChatGPT. The software was considered revolutionary compared to others, sending shockwaves across the global markets. Reuters reported a global investor sell-off across US indexes, with one of the major tech companies alone losing $593 million in one day.
The US government was quick to implement policies that are aimed to promote US-listed tech firms while simultaneously reducing the impact of the DeepSeek AI, such as the use of tariffs against trade with Chinese firms.
The uncertainty of the US economy added to the market volatility after the Federal Reserve announced it would maintain interest between 4.25% and 4.50% in the short term. The banking sector, which is considered a good investment during times of high interest rates, is not completely immune. Analysts who previously considered 2025 to be a low-interest rate year will now price in the impact of possible NPLs (non-performing loans) due to consistent fed rates.
In March, President Trump announced further global tariffs on Europe and China, fuelling the concerns of investors. In retaliation, Europe introduced counter tariffs. Emily Bowersock Hill, CEO and founding partner at Bowersock Capital Partners, which has $850M in assets under management, responded in an email to the methodology in calculating the tariffs by the US as:
“So simplistic, and frankly primitive as to leave the market wondering, did its architects ever take Econ 101?”
The US announced tariffs of 54% on Chinese goods, which will take effect on April 9, 2025. China, in response, implemented “reciprocal” tariffs on US goods of 34%, as reported by the country’s official Xinhua News Agency. This led to the US market indexes experiencing the biggest drop since COVID-19, with investors concerned about the impact of these tariffs on the supply chains of companies globally.
The US economy is considered to be entering “continuous stagflation”, which is defined as continued inflation with very low growth and high unemployment. The Cboe Volatility Index (aka VIX) is currently at 29.68%, well above its 1-year average of 17.6%. In such economic conditions, investors should seek stocks which should provide steady/ growing revenue, dividend growth, low cyclicality, and significant cash flows and have a durable competitive advantage. Systemically important sectors are thus ideal for investors, including energy, real estate, healthcare, finance, and tech.
Methodology
For this list, we analyzed the Tech, Finance, Real Estate, Energy, and Healthcare industries to identify the top stocks for each sector and their historical performance against the market. We then used Insider Monkey’s Q4 2024 proprietary hedge fund holdings database and identified the 12 most popular hedge fund stocks. The stocks are ranked in ascending order of their hedge fund positions.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
A team of financial advisors huddled around a desk, discussing the best investment strategy for their client.
Citigroup Inc. (NYSE:C)
No. of Hedge Fund Holders: 101
Citigroup Inc. (NYSE:C) is a global financial services holding company operating through five segments. The Services segment offers Treasury and Trade Solutions for cash management and Securities Services for post-trade technologies. The Markets segment provides sales and trading across various asset classes and market-making services. The Banking segment encompasses investment banking, advisory services, and corporate lending. U.S. Personal Banking focuses on co-branded cards and retail services. The Wealth segment caters to high-net-worth clients and professional industries with banking, lending, investment, and trust offerings through its Private Bank, Wealth at Work, and Citigold businesses.
Citigroup Inc. (NYSE:C)’s revenue for the first quarter of 2025 was $69.67 million, beating estimates by $69.67 million, and an EPS of $1.36, exceeding expectations by $0.12. Despite the expected losses in credit cards (aka NPLs), operational improvements have led analysts to consider the stock as a reliable and stable stock for any portfolio.
The bank can identify cost reduction techniques that translate to savings for shareholders. In terms of growth, Citigroup Inc. (NYSE:C) continues to gain a foot in the US and reduce exposure to international markets, something that is considered positive in today’s global tariff wars. These are seen as CEO Jane Fraser’s strategy to focus more on corporate banking, asset management, and consumer banking.
A major metric to look at when analyzing the banking industry is the Capital Adequacy Ratio, and Citigroup Inc. (NYSE:C) is maintaining a stable growth in this ratio, rising from $145.6 billion in 2022 to $154.4 billion in 2023—an increase of nearly 6%. In essence, the company continues to be a powerful player in the banking sector, with a market capitalization of $118.82 billion and an average twelve-month trading price of $89.55, an upside of 55.17%. It is among the best beginner stocks to consider.
Overall, C ranks 12th on our list of best beginner stocks. While we acknowledge the potential of C, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than C but that trades at less than 5 times its earnings, check out our report about this cheapest AI stock.
READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires.
Disclosure: None. This article is originally published at Insider Monkey.
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