Reviewing Raymond James Financial (NYSE:RJF) and Citigroup (NYSE:C)

Raymond James Financial (NYSE:RJF) and Citigroup (NYSE:C) are both large-cap finance companies, but which is the superior business? We will compare the two companies based on the strength of their profitability, valuation, institutional ownership, dividends, analyst recommendations, risk and earnings.

Institutional and Insider Ownership

83.8% of Raymond James Financial shares are owned by institutional investors. Comparatively, 71.7% of Citigroup shares are owned by institutional investors. 0.5% of Raymond James Financial shares are owned by insiders. Comparatively, 0.1% of Citigroup shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Dividends

Raymond James Financial pays an annual dividend of $2.00 per share and has a dividend yield of 1.3%. Citigroup pays an annual dividend of $2.24 per share and has a dividend yield of 2.5%. Raymond James Financial pays out 19.2% of its earnings in the form of a dividend. Citigroup pays out 35.4% 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. Raymond James Financial has raised its dividend for 3 consecutive years and Citigroup has raised its dividend for 2 consecutive years.

Analyst Recommendations

This is a summary of current ratings and target prices for Raymond James Financial and Citigroup, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Raymond James Financial	0	10	2	1	2.31
Citigroup	0	5	11	0	2.69

Raymond James Financial presently has a consensus target price of $153.82, suggesting a potential downside of 3.79%. Citigroup has a consensus target price of $85.43, suggesting a potential downside of 3.65%. Given Citigroup’s stronger consensus rating and higher probable upside, analysts clearly believe Citigroup is more favorable than Raymond James Financial.

Risk & Volatility

Raymond James Financial has a beta of 1.02, suggesting that its stock price is 2% more volatile than the S&P 500. Comparatively, Citigroup has a beta of 1.34, suggesting that its stock price is 34% more volatile than the S&P 500.

Profitability

This table compares Raymond James Financial and Citigroup’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Raymond James Financial	13.99%	19.31%	2.74%
Citigroup	7.95%	6.94%	0.55%

Earnings & Valuation

This table compares Raymond James Financial and Citigroup”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Raymond James Financial	$14.92 billion	2.16	$2.07 billion	$10.39	15.39
Citigroup	$170.76 billion	0.97	$12.68 billion	$6.33	14.01

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

Summary

Raymond James Financial beats Citigroup on 11 of the 18 factors compared between the two stocks.

About Raymond James Financial

Raymond James Financial, Inc., a financial holding company, through its subsidiaries, engages in the underwriting, distribution, trading, and brokerage of equity and debt securities, and the sale of mutual funds and other investment products in the United States, Canada, Europe, and internationally. The company operates through Private Client Group, Capital Markets, Asset Management, RJ Bank, and Other segments. The Private Client Group segment provides securities brokerage services, including the sale of equities, mutual funds, fixed income products, and insurance products to their individual clients; and borrowing and lending of securities to and from other broker-dealers, financial institutions, and other counterparties. The Capital Markets segment offers securities brokerage, trading, and research services to institutions with a focus on sale of the United States and Canadian equities and fixed income products; and manages and participates in underwritings, merger and acquisition services, and public finance activities. The Asset Management segment engages in the operations of Eagle, the Eagle Family of Funds, Cougar, the asset management operations of Raymond James & Associates, trust services of Raymond James Trust, and other fee-based asset management programs. The RJ Bank segment provides corporate loans, SBL, tax-exempt loans, and residential loans. The Other segment engages in private equity activities, including various direct and third party private equity investments; and private equity funds. Raymond James Financial, Inc. was founded in 1962 and is based in St. Petersburg, Florida.

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.