8 Best Value Stocks to Invest In According To Warren Buffett

2. Citigroup Inc. (NYSE:C)

Expected Earnings Growth 2024: 3.30%

Latest P/E Ratio: 8.47

Warren Buffett’s Q2 2024 Stake: $3.51 Billion

Number of Hedge Fund Investors as of Q2 2024: 85

Citigroup, Inc. (NYSE:C) is a diversified financial services company that provides financial products and services to consumers. It is one of the bank stocks trading at a significant discount with a price or earnings multiple of 8.47 while offering a 3.44% dividend yield for generating some passive income.

Citigroup, Inc. (NYSE:C) is one of the best value stocks to invest in, according to Warren Buffett, as it is well poised to generate significant long-term value at the back of an ongoing restructuring drive. The bank has embarked on a restructuring drive to boost operational efficiency and profitability.

The plan entails winding down or selling 14 consumer franchises and reducing the workforce. The bank also plans to flatten its management structure by eliminating 300 senior management roles to lower operating expenses and boost margins.

Citigroup, Inc. (NYSE:C) announced a strong second quarter for the year 2024, achieving a net income of $3.2 billion and a profit per share of $1.52. The bank’s earnings rose by 4%, experiencing notable expansion across its Services, Markets, Wealth, and US Personal Banking sectors.

Additionally, it is making progress on its restructuring drive, having already sold 9 of the 14 consumer units. Its cheap valuation makes it an appealing opportunity for value investors, given that it also pays dividends. It has also announced plans to return $1 billion to shareholders through buybacks in the third quarter.

Diamond Hill Capital, an investment management company, released its first-quarter 2024 investor letter. Here is what the fund said:

“Other top Q1 contributors included Meta Platforms, Citigroup Inc. (NYSE:C) and Walt Disney. Banking and financial services company Citigroup’s restructuring efforts are ongoing, and it continues remediating regulatory issues and building capital in anticipation of increased requirements. The company expects to see expenses fall meaningfully in the second half of 2024, bolstering the outlook from here.”