Jim Cramer on Citigroup: The Best in the Group Yet it Has the Cheapest Stock”

Citigroup Inc. (NYSE:C) is one of the 22 stocks Jim Cramer recently talked about. Noting the stock’s cheap valuation, Cramer said:

“Citi announced a 7.1% dividend boost. Now it sports a 2.77% yield. Citi also stressed that they’d started a $20 billion repurchase program in January, and so far this year, they bought back $3.75 billion worth of stock. So, they still have enough ammo to shrink their share count by roughly 10%… Citigroup, the cheapest, trades at just 0.95 times tangible book value. Remember, tangible book value is what the business will be worth, again, in a liquidation scenario. So any bank that trades at a discount to book value, well, it’s unbelievably cheap. CEO Jane Fraser has done a good job of turning Citi around, but clearly, she still has a long way to go. Although this company used to trade at a much lower rate to book value… Citi trades at less than 1 times tangible book value because there’s still a lack of trust in the firm…

And look, when you judge the bank stocks on a price-to-earnings basis, you get a similar story. Citigroup’s the cheapest, selling for just 12 times earnings… Now, when you consider the banks’ expected earnings growth, it doesn’t seem to have much of an impact on these valuations. Citi’s on track to deliver 22% earnings growth in the year. The best in the group, yet it has the cheapest stock…

Still, with the banks featuring discount multiples compared to the overall market, you know what, I’m not so sure that the good times… necessarily have to end for this group. I think they can continue moving higher. The bottom line: In this environment, I bet the big banks are some of the best investments this year, yet still very inexpensive, at least on earnings versus the rest of the market, have more room to run, maybe much more.”

A team of financial advisors huddled around a desk, discussing the best investment strategy for their client.

Citigroup (NYSE:C) is a global financial services company that provides financial products, including cash management, trading, and investment banking services.

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