Critical Review: Guaranty Bancshares (GNTY) and Citigroup (C)

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

Dividends

Citigroup pays an annual dividend of $1.80 per share and has a dividend yield of 2.5%. Guaranty Bancshares pays an annual dividend of $0.60 per share and has a dividend yield of 2.0%. Citigroup pays out 33.8% of its earnings in the form of a dividend. Guaranty Bancshares pays out 38.5% 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 & Institutional Ownership

74.8% of Citigroup shares are owned by institutional investors. Comparatively, 21.0% of Guaranty Bancshares shares are owned by institutional investors. 0.1% of Citigroup shares are owned by company insiders. Comparatively, 22.6% of Guaranty Bancshares shares are owned by company 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 ratings for Citigroup and Guaranty Bancshares, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Citigroup 1 9 14 0 2.54
Guaranty Bancshares 0 2 0 0 2.00

Citigroup currently has a consensus target price of $82.16, suggesting a potential upside of 13.40%. Guaranty Bancshares has a consensus target price of $34.50, suggesting a potential upside of 12.97%. Given Citigroup’s stronger consensus rating and higher possible upside, equities analysts clearly believe Citigroup is more favorable than Guaranty Bancshares.

Profitability

This table compares Citigroup and Guaranty Bancshares’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Citigroup -5.45% 8.78% 0.88%
Guaranty Bancshares 17.33% 8.45% 0.90%

Volatility & Risk

Citigroup has a beta of 1.45, meaning that its share price is 45% more volatile than the S&P 500. Comparatively, Guaranty Bancshares has a beta of -0.05, meaning that its share price is 105% less volatile than the S&P 500.

Earnings & Valuation

This table compares Citigroup and Guaranty Bancshares’ top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Citigroup $87.97 billion 2.12 -$6.80 billion $5.33 13.59
Guaranty Bancshares $86.06 million 4.24 $14.43 million $1.56 19.58

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

Summary

Citigroup beats Guaranty Bancshares on 11 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 Guaranty Bancshares

Guaranty Bancshares, Inc. operates as the bank holding company for Guaranty Bank & Trust, N.A. that provides a range of commercial and consumer banking products and services for small- and medium-sized businesses, professionals, and individuals. It offers various deposit products, such as checking and savings, money market, and business accounts, as well as certificates of deposit; and loan products comprising commercial and industrial, construction and development, commercial real estate, farmland, consumer, one-to-four family residential, multi-family residential, and agricultural loans. The company also provides trust, wealth management, and retirement plan services; and remote deposit capture, online and mobile banking, bank-by-mail, direct deposit, cash and treasury management, ATM, and night depository services, as well as debit cards, e-statements, cashier's checks, and letters of credit. As of March 15, 2018, it had 28 banking locations across 20 Texas communities located within the East Texas, Dallas/Fort Worth metroplex, and Central Texas regions. The company was founded in 1913 and is headquartered in Mount Pleasant, Texas.

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