Contrasting Citigroup (NYSE:C) & Dime Community Bancshares (NASDAQ:DCOM)

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

Dividends

Dime Community Bancshares pays an annual dividend of $1.00 per share and has a dividend yield of 3.0%. Citigroup pays an annual dividend of $2.24 per share and has a dividend yield of 3.3%. Dime Community Bancshares pays out 66.7% of its earnings in the form of a dividend. Citigroup pays out 64.9% 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.

Volatility & Risk

Dime Community Bancshares has a beta of 0.99, suggesting that its share price is 1% less volatile than the S&P 500. Comparatively, Citigroup has a beta of 1.44, suggesting that its share price is 44% more volatile than the S&P 500.

Profitability

This table compares Dime Community Bancshares and Citigroup’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Dime Community Bancshares	9.65%	5.58%	0.46%
Citigroup	4.70%	6.19%	0.49%

Valuation and Earnings

This table compares Dime Community Bancshares and Citigroup”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Dime Community Bancshares	$645.57 million	2.00	$96.09 million	$1.50	22.03
Citigroup	$156.82 billion	0.83	$9.23 billion	$3.45	19.74

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

Analyst Recommendations

This is a breakdown of recent recommendations for Dime Community Bancshares and Citigroup, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Dime Community Bancshares	0	1	2	1	3.00
Citigroup	1	5	11	0	2.59

Dime Community Bancshares currently has a consensus target price of $29.50, indicating a potential downside of 10.74%. Citigroup has a consensus target price of $72.06, indicating a potential upside of 5.83%. Given Citigroup’s higher probable upside, analysts clearly believe Citigroup is more favorable than Dime Community Bancshares.

Institutional and Insider Ownership

75.3% of Dime Community Bancshares shares are held by institutional investors. Comparatively, 71.7% of Citigroup shares are held by institutional investors. 9.1% of Dime Community Bancshares shares are held by company insiders. Comparatively, 0.1% of Citigroup shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Summary

Citigroup beats Dime Community Bancshares on 10 of the 17 factors compared between the two stocks.

About Dime Community Bancshares

Dime Community Bancshares, Inc. operates as the holding company for Dime Community Bank that engages in the provision of various commercial banking and financial services. The company accepts time, savings, and demand deposits from the businesses, consumers, and local municipalities. It also offers commercial real estate loans; multi-family mortgage loans; residential mortgage loans; letters of credit; secured and unsecured commercial and consumer loans; lines of credit; home equity loans; and construction and land loans. In addition, the company invests in Federal Home Loan Bank, Federal National Mortgage Association, Government National Mortgage Association, and Federal Home Loan Mortgage Corporation mortgage-backed securities, collateralized mortgage obligations, and other asset backed securities; U.S. Treasury securities; New York state and local municipal obligations; U.S. government-sponsored enterprise securities; and corporate bonds. Further, it offers certificate of deposit account registry services and insured cash sweep programs; federal deposit insurance corporation insurance; merchant credit and debit card processing, automated teller machines, cash management services, lockbox processing, online banking services, remote deposit capture, safe deposit boxes, and individual retirement accounts; investment products and services through a third-party broker dealer; and title insurance broker services for small and medium sized businesses, and municipal and consumer relationships. The company was founded in 1910 and is headquartered in Hauppauge, New York.

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.