Analyzing Banc of California (NYSE:BANC) & Citigroup (NYSE:C)

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

Volatility & Risk

Citigroup has a beta of 1.44, meaning that its share price is 44% more volatile than the S&P 500. Comparatively, Banc of California has a beta of 1.14, meaning that its share price is 14% more volatile than the S&P 500.

Valuation & Earnings

This table compares Citigroup and Banc of California”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Citigroup	$81.09 billion	1.84	$12.68 billion	$5.95	13.26
Banc of California	$985.89 million	2.37	$126.89 million	$0.56	26.27

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

Dividends

Citigroup pays an annual dividend of $2.24 per share and has a dividend yield of 2.8%. Banc of California pays an annual dividend of $0.40 per share and has a dividend yield of 2.7%. Citigroup pays out 37.6% of its earnings in the form of a dividend. Banc of California pays out 71.4% 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 is clearly the better dividend stock, given its higher yield and lower payout ratio.

Profitability

This table compares Citigroup and Banc of California’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Citigroup	7.43%	6.62%	0.53%
Banc of California	7.06%	6.20%	0.53%

Institutional and Insider Ownership

71.7% of Citigroup shares are held by institutional investors. Comparatively, 86.9% of Banc of California shares are held by institutional investors. 0.1% of Citigroup shares are held by insiders. Comparatively, 7.4% of Banc of California shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Analyst Recommendations

This is a breakdown of current ratings and target prices for Citigroup and Banc of California, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Citigroup	0	3	12	0	2.80
Banc of California	0	4	7	0	2.64

Citigroup currently has a consensus target price of $83.93, indicating a potential upside of 6.36%. Banc of California has a consensus target price of $18.18, indicating a potential upside of 23.58%. Given Banc of California’s higher probable upside, analysts plainly believe Banc of California is more favorable than Citigroup.

Summary

Citigroup beats Banc of California on 10 of the 15 factors compared between the two stocks.

About Citigroup

Citigroup Inc., a diversified financial service holding company, provides various financial product and services to consumers, corporations, governments, and institutions worldwide. It operates through five segments: Services, Markets, Banking, U.S. Personal Banking, and Wealth. The Services segment includes Treasury and Trade Solutions, which provides cash management, trade, and working capital solutions to multinational corporations, financial institutions, and public sector organizations; and Securities Services, such as cross-border support for clients, local market expertise, post-trade technologies, data solutions, and various securities services solutions. The Markets segment offers sales and trading services for equities, foreign exchange, rates, spread products, and commodities to corporate, institutional, and public sector clients; and market-making services, including asset classes, risk management solutions, financing, prime brokerage, research, securities clearing, and settlement. The banking segment includes investment banking; advisory services related to mergers and acquisitions, divestitures, restructurings, and corporate defense activities; and corporate lending, which includes corporate and commercial banking. The U.S. Personal Banking segment provides co-branded cards and retail banking services. The Wealth segment provides financial services to high-net-worth clients through banking, lending, mortgages, investment, custody, and trust product offerings; and to professional industries, including law firms, consulting groups, accounting, and asset management. The company was founded in 1812 and is headquartered in New York, New York.

About Banc of California

Banc of California, Inc. operates as the bank holding company for Banc of California that provides various banking products and services in California. The company offers deposit products, such as checking, savings, money market, demand, and time deposits; certificates of deposit; retirement accounts; and safe deposit boxes. It also provides real estate loans to professional developers and real estate investors for the acquisition, construction, refinancing, renovation, and on-going operation of commercial real estate properties; commercial real estate mortgage, residential real estate mortgage, and real estate construction and land loans; commercial loans and leases, such as equipment finance, other asset-based, venture capital, secured business, warehouse, and other lending services; small business administration loans; and consumer loans comprising personal, auto, and other loans, as well as home equity and revolving lines of credit. In addition, the company offers international banking, multi-state deposit, and asset and investment management services, as well as cash and treasury management services; and online, mobile, remote deposit, and telephone banking services. It serves small and middle-market businesses, venture capital firms, non-profit organizations, business owners, entrepreneurs, professionals, and high-net worth individuals. Banc of California, Inc. was founded in 1941 and is headquartered in Los Angeles, California.