Lampert Sparks Hope for a Citi of Dreams

Regardless of whether he is the one to push for change at Citigroup, there's plenty of reasons to recommend the stock to a value investor such as Lampert.

Citigroup pays a dividend with an annual yield of 4.1%. That approaches the current yield on a 10-year Treasury note. Also, the company is repurchasing shares at a fast clip, returning value to shareholders, and the market is valuing it at just over 10 times Wall Street earnings estimates through 2008.

Then there are signs that Prince is starting to fight for his survival. Citi recently announced plans to slash 17,000 jobs as part of an effort to cut $4 billion in costs annually in the coming years. Some investors have called for it to take a step further and break-up the sprawling organization, splitting its consumer banking divisions away from its global investment banking operations.

If perceptions shift on Wall Street and Prince manages to cut through the veneer of public scrutiny that is dogging his reputation, Citigroup shares at $55 could suddenly look remarkably cheap.