10 Best Dividend Stocks to Buy According to Billionaire Leon Cooperman

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1. Citigroup Inc (NYSE:C)

Number of Hedge Fund Investors: 94

Billionaire Leon Cooperman’s Stake: $18,972,000

Warren Buffett, Leon Cooperman, Ken Fisher, Cliff Asness, Israel Englander – the list of billionaires having stakes in Citigroup Inc (NYSE:C) is long, thanks to Citigroup Inc’s (NYSE:C) strong fundamentals and dividend history. Citigroup Inc (NYSE:C) has upped its dividend every year since 2011. Citigroup Inc (NYSE:C) expects annual revenue growth of about 4%-5% by 2026, and it’s targeting an 11-12% return on tangible common equity in the same period.

Analysts at BofA expect Citi to clock in EPS growth of 8% this year. According to Yahoo Finance data, Citigroup Inc’s (NYSE:C) EPS estimate for the next year (2025) is around $7.21. Assuming the banking sector’s average multiple of 10.32, the stock is currently undervalued. Wall Street’s average analyst estimate for Citigroup Inc (NYSE:C) is $66, while the stock was trading at around $62 as of June 1.

Silver Beech Capital stated the following regarding Citigroup Inc. (NYSE:C) in its first quarter 2024 investor letter:

“Since the beginning of 2023, Citigroup Inc. (NYSE:C) has been one of the Fund’s largest holdings. In our Q3 2023 investor letter, we laid out our core investment thesis for Citi: although the bank was an underperformer (weak returns on equity), Citi was (1) less risky than it had ever been and (2) cheaper than it had ever been. The Fund’s investment thesis for Citi featured in a November 2023 Euromoney article Citi 2.0: If she builds it, will they come?

The market narrative has started to converge on our investment thesis. During the first quarter, Citi was the best-performing bank stock in the S&P 500 index. However, improvements in Citi’s operating performance have come more slowly than its share price gains. Due to this converging market perception with our own thesis, the Fund exited its position in Citi. The Fund’s stake in Citi generated a 34% gross IRR over our 14-month investment period.”

While we acknowledge the potential of Citigroup Inc (NYSE: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 timeframe. If you are looking for an AI stock that is more promising than Citigroup but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

READ NEXT: Michael Burry Is Selling These Stocks and Jim Cramer is Recommending These Stocks.

Disclosure: None. Insider Monkey focuses on uncovering the best investment ideas of hedge funds and insiders. Please subscribe to our free daily e-newsletter to get the latest investment ideas from hedge funds’ investor letters by entering your email address below. You can also look at the 13 High Growth Semiconductor Stocks That Are Profitable in 2024 and the 11 Best AI Penny Stocks to Invest in Now.

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