Dividend.com: Men's Wearhouse Frayed

The Prince and the Citi

Saudi Prince Alwaleed bin Talal, Citigroup's largest individual investor, plans to boost his stake in the U.S. banking giant to 5% from less than 4%.

The prince believes shares are dramatically undervalued and will invest at least $349 million in the company to boost his stake. The company has lost $20.3 billion in the last year and taken tens of billions of dollars of writedowns on mortgage and other toxic debt.

The market has been hard on Citigroup shares, dropping them below $7 in trading yesterday. A huge concern may be the size of consumer credit losses in the first half of 2009. It appears that investors are betting that Citigroup will need further financing to turn its fortunes around.

The company had opportunities to sell shares in a secondary at higher levels several months ago, but failed to take advantage of the opportunity then. Another dividend cut may be needed, or perhaps the company will just have to eliminate the payout entirely. We'll have to wait and see.

Citigroup is not recommended at this time, holding a Dividend.com Rating of 2.8 out of 5 stars.

Men's Wearhouse Profits Wrinkled

Men's Wearhouse (MW - commentary - Cramer's Take) reported late Wednesday that its third-quarter profit fell 61% to $14.6 million, or 28 cents per share, down from a profit of $37.1 million, or 69 cents per share, a year ago.

The company missed EPS by 2 cents as sales dropped 10% to $459.7 million from $512.1 million. The company's bright spot was that tuxedo rentals, which represent 20.99% of fiscal third-quarter sales, did increase slightly.

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At the time of publication, the author had no positions in stocks mentioned, although positions may change at any time.

Tom Reese and Paul Rubillo are senior editors of Dividend.com. Visit Dividend.com for more dividend stock ratings, picks, news, and analysis for long-term and income-seeking investors.