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Citigroup: Cut to Profit Winner

Citigroup is currently paying a nominal quarterly dividend of a penny a share, and the company has not repurchased any shares this year.

After the Federal Reserve announced its methodology for the next round of bank stress tests, Barclays analyst Jason Goldberg on Nov. 12 said he expects Citigroup to raise its quarterly dividend to four cents a share following the stress tests, while gaining Fed approval to repurchase $2 billion worth of common shares, or 1.7% of shares outstanding, through the first quarter of 2014.

C ChartC data by YCharts

Interested in more on Citigroup? See TheStreet Ratings' report card for this stock.

Bank of America Passes the $10 Mark


Bank of America's shares on Wednesday closed above $10 for the first time since July 2011. The shares have now returned a whopping 89% year-to-date, following a 58% decline during 2011. But the shares are still down 25% since the end of 2010.

BAC shares trade for 0.8 times their reported Sept. 30 tangible book value of $13.48, and for 11 times the consensus 2013 earnings estimate of 97 cents a share, among analysts polled by Thomson Reuters. The consensus 2014 EPS estimate is $1.27.

Like Citigroup, Bank of America pays a quarterly dividend of a penny a share, and has not bought back any shares during 2012.

In his Nov. 11 report, Goldberg said that after the next round of Federal Reserve stress tests are completed in March, he expects Bank of America to raise the quarterly dividend to six cents, while also being approved to repurchase $3 billion worth of common shares (2.8% of outstanding shares) through the first quarter of 2014.

When asked about Bank of America's trading action on Wednesday, Tom Brown, who runs Bankstocks.com and manages Second Curve Capital said in an email that "traders want to own the 'beta' names." The chart below shows just how volatile a name Bank of America has been this year:

BAC ChartBAC data by YCharts

Interested in more on Bank of America? See TheStreet Ratings' report card for this stock.

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-- Written by Philip van Doorn in Jupiter, Fla.

>Contact by Email.

Philip W. van Doorn is a member of TheStreet's banking and finance team, commenting on industry and regulatory trends. He previously served as the senior analyst for TheStreet.com Ratings, responsible for assigning financial strength ratings to banks and savings and loan institutions. Mr. van Doorn previously served as a loan operations officer at Riverside National Bank in Fort Pierce, Fla., and as a credit analyst at the Federal Home Loan Bank of New York, where he monitored banks in New York, New Jersey and Puerto Rico. Mr. van Doorn has additional experience in the mutual fund and computer software industries. He holds a bachelor of science in business administration from Long Island University.
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