Banco Macro (BMA) versus Citigroup (C) Financial Analysis

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

Valuation & Earnings

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

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Citigroup $87.97 billion 2.00 -$6.80 billion $5.33 12.87
Banco Macro $2.21 billion 3.23 $567.08 million $8.65 12.53

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

Dividends

Citigroup pays an annual dividend of $1.28 per share and has a dividend yield of 1.9%. Banco Macro pays an annual dividend of $0.75 per share and has a dividend yield of 0.7%. Citigroup pays out 24.0% of its earnings in the form of a dividend. Banco Macro pays out 8.7% 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.

Insider and Institutional Ownership

80.2% of Citigroup shares are held by institutional investors. Comparatively, 30.6% of Banco Macro shares are held by institutional investors. 0.1% of Citigroup shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term 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%

Analyst Ratings

This is a summary of recent ratings and recommmendations for Citigroup and Banco Macro, as provided by MarketBeat.

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 presently has a consensus target price of $81.72, suggesting a potential upside of 19.13%. Banco Macro has a consensus target price of $113.70, suggesting a potential upside of 4.89%. Given Citigroup’s higher probable upside, analysts clearly believe Citigroup is more favorable than Banco Macro.

Volatility and Risk

Citigroup has a beta of 1.56, meaning that its share price is 56% more volatile than the S&P 500. Comparatively, Banco Macro has a beta of 1.25, meaning that its share price is 25% more volatile than the S&P 500.

Summary

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

Citigroup Company Profile

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.

Banco Macro Company Profile

Banco Macro S.A. provides various banking products and services to individuals and corporate customers in Argentina. It offers various retail products and services, such as savings and checking accounts, time deposits, credit and debit cards, consumer finance loans, mortgage loans, automobile loans, overdrafts, credit-related services, home and car insurance coverage, tax collection, utility payments, automated teller machines (ATMs), and money transfers. The company also provides personal loans, document discounts, mortgages, overdrafts, pledged loans, and credit card loans to retail customers. In addition, it offers corporate banking products and services that include deposits, lending, check cashing advances and factoring, guaranteed loans, credit lines for financing foreign trade, and cash management services. Further, the company provides trust, payroll, and financial agency services, as well as corporate credit cards and other specialty products; transaction services, such as collection services, payments to suppliers, payroll services, foreign exchange transactions, and foreign trade services; and information services, such as Datanet and Interpymes services to corporate customers. As of December 31, 2016, it operated through a network of 444 branches, 1,395 ATMs, 920 self-service terminals, and service points. Banco Macro S.A. also offers Internet banking services. The company was incorporated in 1988 and is headquartered in Buenos Aires, Argentina.

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