Financial stocks have shown great strength to start the year off. Many stocks have had an unstable start to 2022. Much more caution will be need while trading and investing. Value stocks are outperforming growth stocks after what we’ve heard so far from the Federal Reserve. We believe the banking sector is a safe bet for stable returns this year and Citigroup shares could be a good pick.

Earnings

Earnings release for several companies on Friday morning and Citigroup is among those names. Other banks that also release earnings are JPMorgan Chase and Wells Fargo. One aspect we will be looking out for is the repurchasing of shares from the Company and the announcement to do so during this quarter. As value stocks become the main choice, investors will be looking out for companies repurchasing shares. This helps boost share price and provide shareholder value.

A strong start to the year

Citigroup started the year well, now up 9.6% from December 31st closing price. Bank stocks generally edged up over the first week of the year as yields on longer-term Treasury bills are rising. Citigroups share price trades at just 80% of its tangible book value. Inflation has been a topic among many this year. Banks are a great way to hedge yourself against this.

We have always loved dividend stocks to include in our portfolio. Citigroup also offers a 3.4% yield for you to compound your investment. More reasons why we think it is a great buy this year.

CEO outlook

Jane Fraser, the CEO, said in their Q3 earnings, “We are moving forward with urgency on our top priorities in order to responsibly narrow the returns gap with our peers: the Transformation, refreshing our strategy and building a culture of excellence. So far this year, we have returned close to $11 billion to shareholders through a healthy dividend and stock repurchases. We remain committed to returning excess capital over and above the amount necessary to invest in our franchise and to maintain our safety and soundness.”

What price can 2022 offer?

The Citigroup share price has failed to hold above $80 for very long over the past four years. The price is currently at $66.30 in pre market trading, needing another 20% to reach $80 again. I think that is an attainable target to reach this year.

AlphaPicks does not own shares in Citigroup. To buy shares and crypto, register here with our preferred partner, EToro.

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