Citigroup's Asia Moves Good for Stock: Analyst

NEW YORK ( TheStreet)-- Citigroup's ( C) expansion into Asia is a reason to buy shares, says RBC Capital Markets analyst Gerard Cassidy.

"This is definitely one of the long term reasons to own Citigroup," said RBC Capital Market analyst Gerard Cassidy. "This is a good play for investors who want to see some growth from emerging or international markets."

Citigroup is expected to sign a joint venture securities business agreement with Orient Securities Company of Shanghai by Thursday according to The Wall Street Journal. Citigroup would not comment on the report.

"This U.S. company has had 60 percent of its growth come from international markets, and its expansion into Asia and the emerging markets is a good growth plan," Cassidy said, adding he rated Citigroup as "outperform."

"By declaring a dividend the goal was to bring in institutional investors," said Cassidy. "I'm not sure more institutional investors got in after the reverse split. If they had to do it again I would suggest they not do it because of all the anger it caused among shareholders."

Cassidy says he expects Citigroup's dividend to increase to over a dollar per share from four cents a year by 2012 with a payout ratio of 15-20 percent of earnings expected in 2012.

Separately, Citigroup has also said that it will be adding 10 managing directors to its Asian investment banking business, according to The Wall Street Journal. Cassidy has a 2011 EPS of $4.89 and a 2012 EPS of $6.05.

Tom Mitchell, an analyst at Miller Tabak & Co. said that a joint venture in China mirrors Morgan Stanley ( MS) and JPMorgan's ( JPM) securities joint ventures in the country which were announced in January.

"It is natural for Citigroup to want to be in China," said Tom Mitchell, an analyst at Miller Tabak & Co. "It is where the money is right now. If you are large enough you have to be there."

Mitchell adds that the reverse stock split did not change how investors view Citigroup.

--Written by Maria Woehr in New York.

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