Embattled banking giant Citigroup Inc. ( C ) said Monday its board has approved a reverse 1-for-10 stock split and would reinstate a quarterly dividend payout this year.
The company, which currently trades at under $5 per share, will utilize the split to boost its share price and lower the number of shares outstanding to around 2.9 billion.
The quarterly dividend payout of just 1 penny per share will begin in May, immediately following the stock split.
CEO Vikram Pandit commented, "Citi is a fundamentally different company than it was three years ago. The reverse stock split and intention to reinstate a dividend are important steps as we anticipate returning capital to shareholders starting next year."
Once considering one of the strongest financial institutions in the country, Citi was hit harder than most by the financial meltdown of 2007-2008. Its stock has since lost more than 90% of its value from all-time highs reached in late 2007.
Citigroup shares rose 10 cents, or +2.2%, in premarket trading Monday.
The Bottom Line
The dividend payout is certainly going to be miniscule at the start, but at least the company has taken a first step. Not one of our favorites at this point.
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