GuruFocus Research
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Understanding the Dividend Landscape of Citigroup Inc
Citigroup Inc (NYSE:C) recently announced a dividend of $0.53 per share, payable on 2024-02-23, with the ex-dividend date set for 2024-02-02. As investors look forward to this upcoming payment, the spotlight also shines on the company's dividend history, yield, and growth rates. Using the data from GuruFocus, let's look into Citigroup Inc's dividend performance and assess its sustainability.
What Does Citigroup Inc Do?
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Citigroup is a global financial-services company doing business in more than 100 countries and jurisdictions. Citigroup's operations are organized into two primary segments: the institutional clients group and the personal banking and wealth-management group. The bank's primary services include cross-border banking needs for multinational corporates, investment banking and trading, and credit card services in the United States.
A Glimpse at Citigroup Inc's Dividend History
Citigroup Inc has maintained a consistent dividend payment record since 2011. Dividends are currently distributed on a quarterly basis. Citigroup Inc has increased its dividend each year since 2011. The stock is thus listed as a dividend achiever, an honor that is given to companies that have increased their dividend each year for at least the past 13 years. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Citigroup Inc's Dividend Yield and Growth
As of today, Citigroup Inc currently has a 12-month trailing dividend yield of 3.63% and a 12-month forward dividend yield of 3.67%. This suggests an expectation of increased dividend payments over the next 12 months. Over the past three years, Citigroup Inc's annual dividend growth rate was 2.00%. Extended to a five-year horizon, this rate increased to 14.30% per year. And over the past decade, Citigroup Inc's annual dividends per share growth rate stands at an impressive 62.60%.
Based on Citigroup Inc's dividend yield and five-year growth rate, the 5-year yield on cost of Citigroup Inc stock as of today is approximately 7.08%.
The Sustainability Question: Payout Ratio and Profitability
To assess the sustainability of the dividend, one needs to evaluate the company's payout ratio. The dividend payout ratio provides insights into the portion of earnings the company distributes as dividends. A lower ratio suggests that the company retains a significant part of its earnings, thereby ensuring the availability of funds for future growth and unexpected downturns. As of 2023-12-31, Citigroup Inc's dividend payout ratio is 0.49.
Citigroup Inc's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Citigroup Inc's profitability 5 out of 10 as of 2023-12-31, suggesting fair profitability. The company has reported net profit in 9 years out of past 10 years.
Growth Metrics: The Future Outlook
To ensure the sustainability of dividends, a company must have robust growth metrics. Citigroup Inc's growth rank of 5 out of 10 suggests that the company has a fair growth outlook. Revenue is the lifeblood of any company, and Citigroup Inc's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Citigroup Inc's revenue has increased by approximately 5.00% per year on average, a rate that underperforms than approximately 58.87% of global competitors.
The company's 3-year EPS growth rate showcases its capability to grow its earnings, a critical component for sustaining dividends in the long run. During the past three years, Citigroup Inc's earnings increased by approximately -4.00% per year on average, a rate that underperforms than approximately 85.29% of global competitors.
Lastly, the company's 5-year EBITDA growth rate of 6.40%, which underperforms than approximately 56.53% of global competitors.
Next Steps
In conclusion, Citigroup Inc's dividend payments, growth rate, and payout ratio suggest a commitment to returning value to shareholders. The company's consistent dividend increases and a reasonable payout ratio speak to its financial stability. However, Citigroup Inc's profitability and growth metrics present a mixed picture, indicating areas where the company may need to improve to sustain its dividend growth over the long term. Investors should consider these factors in their overall assessment of Citigroup Inc as a potential investment for dividend income. For those looking to explore further, GuruFocus Premium users can screen for high-dividend yield stocks using the High Dividend Yield Screener.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circ*mstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
This article first appeared on GuruFocus.
