Citi Fights BofA for ‘Most Underwhelming Dividend’ Award (C, BAC)

Citigroup, Inc. (NYSE: C) announced its current dividend policy, most of which we already knew.  The turnaround bank has declared a whole $0.01 per quarter dividend on its common stock.  The company’s prior reinstatement announcement came on March 21.

Today’s dividend will go to holders of record on May 27, 2011 and will be paid on June 17, 2011.

Had this been a one-penny payout before the 1-for-10 reverse stock split then it would have meant something.  The one-penny payout with shares at $42.00 or so is not even quite 0.1%.

Citigroup still has a long way to go before its dividend gets reinstated at higher rates and it is still trying to get down to the core-Citigroup.  The only other money-center bank dividend that is almost as unimpressive is that of Bank of America Corporation (NYSE: BAC) with almost a 0.3% payout.

The difference between BofA and Citigroup is that BofA will almost certainly be allowed to reinstate a higher dividend much sooner than Citigroup.  Other than that, there just is not that much more to say other than that this is a token effort aimed solely at still being within the policy limits of investment firms or funds which cannot invest in companies that do not pay dividends. 

JON C. OGG