We recently published a list of 12 Best Fortune 500 Dividend Stocks To Buy Right Now. In this article, we are going to take a look at where Citigroup Inc. (NYSE:C) stands against other best Fortune 500 dividend stocks to buy right now.
Compiled and published by Fortune Magazine, the Fortune 500 is an annual list that ranks the biggest US companies by revenue. In total, the Fortune 500 companies represent two-thirds of the US GDP with $18.8 trillion in revenues, $1.7 trillion in profits, and $43 trillion in market value (as of March 28, 2024), and they employ a workforce of 31 million around the globe.
2024 proved to be a big year for large-cap stocks, as the broader US market achieved gains of nearly 25%, piggybacking on a 26% performance the year before. Large-cap stock funds, with the heaviest tilt toward growth stocks, performed the best last year, even as the market’s rally somewhat broadened from the handful of mega tech companies that have led much of the bull market.
However, the tailwinds that propelled the market to new heights are beginning to recede, as the rate of monetary policy easing slows down, long-term interests swing upward, inflation becomes sticky, and the US economy is slowing down. Moreover, the upcoming presidency of Donald Trump and his much-rumored tariffs could also herald a more volatile period for markets, as they could further fan inflation fears and put pressure on stock prices.
That said, the expected upcoming fluctuation isn’t going to be something that the mega corporations haven’t dealt with before. A 2023 report by J. P. Morgan revealed that despite the considerable volatility during the period, large-cap stocks gained around 162% between 2013 and 2023, galvanized primarily by big tech. Another 2023 report by CNBC unveiled that large US companies outperformed other investments between 2003 and 2023, with average returns of 9.3%. However, it hasn’t always been a smooth ride, as despite the stability and reliability large-cap stocks are known for, investors had to survive drops of 56.8% during the 2007-2009 bear market, 33.9% in 2020, and 25.4% in 2022.
In addition to the few tech giants regularly making headlines with their gains, large-cap dividend stocks could also be an attractive option for investors looking for a reliable, significant, and growing stream of income. According to Howard Silverblatt, Senior Index Analyst at S&P Dow Jones Indices, the broader US large caps are expected to post an 8% increase in dividend payments in 2025, compared to the 6.4% uptick in 2024, 5.1% gains in 2023, and the 10.8% increase witnessed in 2022.
Large-cap companies tend to have more robust balance sheets compared to their smaller counterparts, enabling them to navigate through market fluctuations more smoothly while also returning value to their shareholders. Corporations in the US have continuously grown their considerable cash stockpiles since the beginning of the pandemic, thanks to the economic resilience we have witnessed recently. A report from treasury advisory firm Carfang Group revealed that as of Q1 2024, US corporations increased their cash holdings to an all-time high of $4.11 trillion, up 12.6% from the same period in 2024 and $1.28 trillion more from their pre-pandemic levels.
Methodology
To collect data for this article, we referred to the top 50 companies among the Fortune Global Rankings. Then, we picked out 12 US-listed companies with the highest dividend yields as of January 13, 2025, and ranked them by their number of hedge fund investors according to the Insider Monkey database as of Q3 2024.
At Insider Monkey we are obsessed with the stocks that hedge funds pile into. The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
Is Citigroup Inc. (C) The Best Fortune 500 Dividend Stock To Buy Right Now?
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Citigroup Inc. (NYSE:C) is an American multinational investment bank and financial services company with operations in nearly 180 countries and jurisdictions. Citigroup is going through a multi-year transformation, divesting complex business units and focusing on areas where they can at least earn the cost of capital. Over the last three years, the company has made significant strides in areas such as risk management, compliance, and accountability. The stock has outperformed the market in the past 12 months, surging by over 54%, which places it on our list of the best large cap stocks.
Citigroup Inc. (NYSE:C)’s strategic focus on its Services business is bearing fruit, and in Q3 2024, the segment delivered a record quarter with revenues up by 8%. The company is taking advantage of its extensive global network to address cross-border financial needs, aiming for growth in a segment that accounted for 23% of its overall revenue in 2023. Citigroup is also the first global bank to complete the integration of its cross-border services with Mastercard Move, a step that will ultimately enable near-instant secure payments to the vast Mastercard debit network, starting with 14 markets with more to come early next year.
Citigroup Inc. (NYSE:C) had a strong Q3 2024, as it delivered revenue growth and positive operating leverage across all five of its businesses, reflecting the growing diversity of its earnings mix. The company reported an overall revenue of $20.32 billion, up 0.9% YoY and beating the analysts’ estimates by $500 million. Notably, Citigroup’s expenses were also down 2% YoY during the quarter, largely driven by savings associated with its organizational simplification and stranded cost reductions.
Citigroup Inc. (NYSE:C) is a reliable dividend payer and returned $2.1 billion in the form of common dividends and share repurchases in the third quarter of 2024, reflecting the company’s confidence in its financial stability and its ability to generate excess capital even while investing in its transformation initiatives. The company declared a quarterly dividend of $0.56 per share in October and has never missed a dividend payment in over 34 years.
Overall, C ranks 3rd on our list of best Fortune 500 dividend stocks to buy right now. While we acknowledge the potential for C as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than C but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
