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WB Wachovia or C Citycorp when it is time for proletarians to own banks? May 31, 2006

Posted by deminvest in C Citycorp, Dogs of the Dow, investment, Single stocks, stock I own, stocks, WB Wachovia.

Yes it is time for us, the people, the poor to own the same banks where we humbly enter intimidated by the magnificence of their solid institutional looks. That mainly for two reasons:

1) We understand very well what banks do (and do to us, their humble customers!)

2) Us banks are extremely successful and competitive businesses amazingly cheap to buy.

3) We can now buy banks for peanuts… Yes I already said that on 2)… But I like the idea, don’t you?

4) I believe that World (and US) economy is still strong and stock prices will soon restart to grow.


I have centred my attention on two US banks, n.1 C Citycorp and n. 3 Wachovia Corp, because of their cheap price ( low P/E), good Dividend Yields and nice growth.


C Citycorp has:


Trailing P/E:10.13

Forward P/E:10.47

Trailing Annual Dividend Yield: 3.80%

Qtrly Revenue Growth (yoy):7.20%

Qtrly Earnings Growth (yoy):3.60%


WB Wachovia has:


Trailing P/E:12.39

Forward P/E:10.31

Trailing Annual Dividend Yield: 3.90%

Qtrly Revenue Growth (yoy):11.10%

Qtrly Earnings Growth (yoy):6.60%


Basically those two great banks are very similar, but I opt for WB Wachovia for 2 reasons:

1) Because it is growing a little bit more than C Citycorp.

2) Because I already own C and I want to diversify.


So I buy WB and… let the bulls out like I expect fellow proletarians!


PS I add a list of greatest banks in US and in the world, which I copied from Wikipedia and which was useful for me to decide Wachovia, overlooking the suspicious strangeness of its funny name.










Top ten banking groups in the world ranked by tier 1 capital in 2004 (in U.S. dollars)

  1. Citigroup — 73 billion
  2. HSBC — 71 billion
  3. JP Morgan Chase — 69 billion
  4. Royal Bank of Canada — 68 billion
  5. Credit Agricole Group — 63 billion
  6. Royal Bank of Scotland — 43 billion
  7. Mitsubishi Tokyo Financial Group — 40 billion
  8. Mizuho Financial Group — 39 billion
  9. HBOS — 36 billion
  10. BNP Paribas — 35 billion


Top ten banking groups in the world ranked by assets in 2004 (in U.S. dollars)

  1. UBS — 1,533 billion
  2. Citigroup — 1,484 billion
  3. Mizuho Financial Group — 1,296 billion
  4. HSBC Holdings — 1,277 billion
  5. Crédit Agricole — 1,243 billion
  6. BNP Paribas — 1,234 billion
  7. JPMorgan Chase & Co. — 1,157 billion
  8. Deutsche Bank — 1,144 billion
  9. Royal Bank of Scotland — 1,119 billion
  10. Bank of America — 1,110 billion

Top ten bank holding companies in the world ranked by profit in 2003 (in U.S. dollars)

  1. Citigroup — 21 billion
  2. Bank of America — 15 billion
  3. HSBC — 10 billion
  4. Royal Bank of Scotland — 8 billion
  5. Wells Fargo — 7 billion
  6. JP Morgan Chase — 7 billion
  7. UBS AG — 6 billion
  8. Wachovia — 5 billion
  9. Morgan Stanley — 5 billion
  10. Merrill Lynch — 4 billion


Top ten bank holding companies in the U.S. ranked by deposits (in U.S. dollars)

As of June 30, 2004. These are U.S. deposits only. This is not a ranking of the largest U.S.-based global banks.

  1. Bank of America Corp. — 526 billion
  2. Wells Fargo & Co. — 256 billion
  3. Wachovia Corp. — 238 billion
  4. J.P. Morgan Chase & Co. — 227 billion (1)
  5. Citigroup Inc. — 193 billion
  6. Bank One Corp. — 150 billion (1)
  7. U.S. Bancorp — 112 billion
  8. SunTrust Banks, Inc. — 78 billion
  9. BB&T Corporation — 67 billion
  10. National City Corp. — 64 billion




1. robbie - August 14, 2006

Have been in Wells Fargo and US Bancorp about 5 years with wonderful returns and great dividends. Are they still cheap stocks? I don’t know but seems like they always hit their numbers. Wachovia, JP Morgan and Citi seem excelent too. The problem is the US economy is going to slow, so be careful. Stock prices are usually much more volatile than the businesses themselves. Good Luck !!

ps. ABN Amro looks cheap for a solid Euro bank play

2. deminvest - August 14, 2006

In my opinion they are still cheap and Banks like those can make good mony even in a slower economy with higher rates. Your porposal for ABN Amro seems also very interesting.

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