Citigroup (NYSE: C) and Banco Macro (NYSE:BMA) are both finance companies, but which is the superior stock? We will contrast the two businesses based on the strength of their valuation, risk, institutional ownership, dividends, profitability, analyst recommendations and earnings.

Insider and Institutional Ownership

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80.1% of Citigroup shares are owned by institutional investors. Comparatively, 30.6% of Banco Macro shares are owned by institutional investors. 0.1% of Citigroup shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Analyst Recommendations

This is a summary of current recommendations and price targets for Citigroup and Banco Macro, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Citigroup 1 9 12 0 2.50
Banco Macro 0 2 3 0 2.60

Citigroup currently has a consensus price target of $81.39, suggesting a potential upside of 11.01%. Banco Macro has a consensus price target of $113.70, suggesting a potential upside of 4.12%. Given Citigroup’s higher probable upside, research analysts clearly believe Citigroup is more favorable than Banco Macro.

Dividends

Citigroup pays an annual dividend of $1.28 per share and has a dividend yield of 1.7%. Banco Macro pays an annual dividend of $0.75 per share and has a dividend yield of 0.7%. Citigroup pays out -41.3% of its earnings in the form of a dividend. Banco Macro pays out 9.0% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Citigroup has increased its dividend for 3 consecutive years. Citigroup is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

This table compares Citigroup and Banco Macro’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Citigroup -7.05% 7.61% 0.83%
Banco Macro 21.88% 25.77% 4.76%

Volatility & Risk

Citigroup has a beta of 1.51, meaning that its share price is 51% more volatile than the S&P 500. Comparatively, Banco Macro has a beta of 1.18, meaning that its share price is 18% more volatile than the S&P 500.

Earnings and Valuation

This table compares Citigroup and Banco Macro’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Citigroup $87.97 billion 2.14 -$6.80 billion ($3.10) -23.65
Banco Macro $2.21 billion 3.25 $567.08 million $8.34 13.09

Banco Macro has lower revenue, but higher earnings than Citigroup. Citigroup is trading at a lower price-to-earnings ratio than Banco Macro, indicating that it is currently the more affordable of the two stocks.

Summary

Citigroup beats Banco Macro on 9 of the 17 factors compared between the two stocks.

About Citigroup

Citigroup Inc., a diversified financial services holding company, provides various financial products and services for consumers, corporations, governments, and institutions. The company operates through two segments, Global Consumer Banking (GCB) and Institutional Clients Group (ICG). The GCB segment offers traditional banking services to retail customers through retail banking, commercial banking, Citi-branded cards, and Citi retail services. It also provides various banking, credit card lending, and investment services through a network of local branches, offices, and electronic delivery systems. The ICG segment provides wholesale banking products and services, including fixed income and equity sales and trading, foreign exchange, prime brokerage, derivative services, equity and fixed income research, corporate lending, investment banking and advisory services, private banking, cash management, trade finance, and securities services to corporate, institutional, public sector, and high-net-worth clients. The company operates in North America, Latin America, Asia, Europe, the Middle East, and Africa. Citigroup Inc. was founded in 1812 and is based in New York, New York.

About Banco Macro

Banco Macro SA is an Argnetina-based financial institution (the Bank) that offers traditional bank products and services to companies, including those operating in regional economies, as well as to individuals. In addition, the Bank performs certain transactions through its subsidiaries, including mainly Banco del Tucuman, Macro Bank Ltd, Macro Securities SA, Macro Fiducia SA and Macro Fondos SGFCI SA. It has approximately two categories of customers, such as retail customers, including individuals and entrepreneurs and corporate customers, which include small, medium and large companies and major corporations. In addition, it provides services to over four provincial governments. It provides its corporate customers with traditional banking products and services, such as deposits, lending (including overdraft facilities), check cashing advances and factoring, guaranteed loans and credit lines for financing foreign trade and cash management services.

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