Citigroup vs Goldman Sachs Which Should You Buy?

Citigroup and Goldman Sachs are two of the largest and most prestigious financial institutions in the world, with a significant presence in the global stock market. Both companies have a long history of success and have weathered numerous economic downturns. However, they have different business models and approaches to investment, leading to unique strengths and weaknesses in their respective stocks. Understanding the dynamics of Citigroup vs Goldman Sachs stocks can provide valuable insights for investors looking to optimize their portfolios.

Citigroup or Goldman Sachs?

When comparing Citigroup and Goldman Sachs, 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 Citigroup and Goldman Sachs.

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. Citigroup has a dividend yield of 3.03%, while Goldman Sachs has a dividend yield of 1.98%. Beyond the yield itself, considering the growth and sustainability of these dividends is also crucial. Citigroup reports a 5-year dividend growth of 2.57% year and a payout ratio of 30.63%. On the other hand, Goldman Sachs reports a 5-year dividend growth of 22.61% year and a payout ratio of 23.42%.

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 Citigroup P/E ratio at 12.34 and Goldman Sachs's P/E ratio at 13.39. Another crucial valuation metric is the Price-to-Book (P/B) Ratio, which compares stock price with book value per share. Citigroup P/B ratio is 0.75 while Goldman Sachs's P/B ratio is 1.57.

Growth Investors:

Growth investors prioritize metrics indicative of a company's expansion potential. Focusing on top-line growth, Citigroup has seen a 5-year revenue growth of 0.12%, while Goldman Sachs's is 0.77%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with Citigroup's ROE at 6.09% and Goldman Sachs's ROE at 11.87%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are $71.70 for Citigroup and $576.78 for Goldman Sachs. Over the past year, Citigroup's prices ranged from $53.51 to $84.74, with a yearly change of 58.36%. Goldman Sachs's prices fluctuated between $381.42 and $672.19, with a yearly change of 76.23%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.