Bank of America vs Citigroup Which Outperforms?

Both Bank of America and Citigroup are major financial institutions that play a critical role in the global economy. Both companies offer a range of financial products and services, including banking, investment, and lending. Investors often compare the two companies' stocks when considering their investment options. Bank of America is known for its strong retail banking presence, while Citigroup has a larger international footprint. Understanding the strengths and weaknesses of each company can help investors make informed decisions about their portfolios.

Bank of America or Citigroup?

When comparing Bank of America and Citigroup, different investors may prioritize various metrics based on their investment strategies and goals. So, ask yourself what type of investor you are. This will guide you in determining which metrics are most important for your investment decision between Bank of America and Citigroup.

Dividend Investors:

Dividend investors look for stable and growing income streams, using dividend metrics to assess potential investments. A company's dividend yield essentially measures the size of its dividend relative to the total market value of the company. Bank of America has a dividend yield of 2.19%, while Citigroup has a dividend yield of 3.07%. Beyond the yield itself, considering the growth and sustainability of these dividends is also crucial. Bank of America reports a 5-year dividend growth of 11.24% year and a payout ratio of 40.07%. On the other hand, Citigroup reports a 5-year dividend growth of 6.20% year and a payout ratio of 68.31%.

Value Investors:

Value investors focus on financial metrics to determine a stock's intrinsic value compared to its market value. The Price-to-Earnings (P/E) Ratio links stock price to a company's earnings per share, with Bank of America P/E ratio at 15.12 and Citigroup's P/E ratio at 17.73. Another crucial valuation metric is the Price-to-Book (P/B) Ratio, which compares stock price with book value per share. Bank of America P/B ratio is 1.20 while Citigroup's P/B ratio is 0.65.

Growth Investors:

Growth investors prioritize metrics indicative of a company's expansion potential. Focusing on top-line growth, Bank of America has seen a 5-year revenue growth of 0.41%, while Citigroup's is 0.39%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with Bank of America's ROE at 8.03% and Citigroup's ROE at 3.67%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are $45.38 for Bank of America and $70.77 for Citigroup. Over the past year, Bank of America's prices ranged from $31.27 to $48.08, with a yearly change of 53.76%. Citigroup's prices fluctuated between $49.17 and $73.38, with a yearly change of 49.24%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.