Who Are You Banking On?: Citigroup Inc. (C), American International Group and More

American International Group, Inc. (NYSE:AIG)

Whilst BAC and C are appealing, the mega bank in my view that offers the best potential for returns is American International Group. What was the poster child for wiping out shareholder equity in 2008, is now in my opinion a prime, long term investment opportunity.

With a P/B Valuation of just 0.56, AIG could well be a winner for those prepared to ride the inevitable bumps over the next few years. As with BAC and C, assuming absolutely no earnings growth and a gradual repricing to a Price-to-Book of 1.0 AIG well might see growth from its current price of $38 to a respectable $67 (a retirement fund boosting potential return of 76%).

With these investment ideas outlined above I have not even considered the possibility should the market become somewhat more optimistic and favorable in its view and pricing of the mega banks. I have only worked off the figures of a P/B of 1. Imagine the potential returns should Price-to-Book valuations reflect a market view of growth and high quality balance sheets!

The article Who Are You Banking On? originally appeared on Fool.com and is written by Jarrod Bailey.

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