Senior Analyst Jim Sinegal of Morningstar says that Citigroup Inc (C) is an attractive, undervalued stock right now that will have a lot more investor interest once it boosts its dividend and payout capital and continues its exposure to developing markets.
“We think Citigroup worth $57. It’s trading a little under $50 the last I looked. So that’s equal to tangible book value per share. It’s a little over nine times the consensus EPS for 2015, so that’s fairly cheap on an absolute and a relative basis. The other big banks are 10 to 12 times forward earnings,” Sinegal said.
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Sinegal also likes Citigroup’s strong management and board, and believes that the company has solid growth prospects and a number of options to improve its business.
“Citi’s management has been doing a great job for several years now, especially at the board level,” Sinegal said. “It is probably the strongest board out of all the big banks.”
“Citi has exposure to developing markets is a big plus for long-term growth,” Sinegal added. “From growth prospects and the number of options they have to improve their business to the management at the board side, and then that the valuation is very cheap on a price to tangible book and price to earnings basis — all of this makes Citigroup a good stock right now.”