Michael Price Talks Dividends and Citigroup

Michael Price is invited to a radio interview, he is asked how is he going to turn to see the group of banking shares he gets and how Citigroup will survive. He says that Citigroup is going to survive because the Government is going to walk through this period. Seventy billion dollars of new capital will come into the balance. The company takes the first forty billion losses and after that they only take ten percent of the losses. After that he talks about Citigroup, there are units that run very well, but also there are units that will be sold. Then, you got seven or eight billion coming in cash from Morgan Stanley and Smith Barney joint venture, you got forty billion in tax credits, you got real estate assets, so everywhere you look you will find another ten or twenty cents a share.

Michael Price says that you can't run huge conglomerates in finances. He is asked to define a utility bank with a new financial service. He says that this would be very focused, starting community, create regional community where they know their customers and they really watch over their balance sheets carefully. Banks are allowed to run at twelve or fifteen times leverage. He is asked why he doesn't buy community banks then. He is along a little bigger banking.

Banks would rather take the government's money even if with the strings attached, then his money, diluting the common. After that, they talk about dividends and he is asked where is his best quality dividend screen now. Michael Price thinks that you need to be very careful with dividends. If the company has a clean as a whistle balance sheet, their dividends make it through, but companies in this environment need to bring dividends down. In some cases, the capital need were so great, but in most of the cases banks could go into private markets.

Michael Price quotes from this video:

  • You need to be very careful with dividends
  • Everywhere you look you will find another ten or twenty cents a share
Submitted by YouTube Trader on Sun, 04/04/2010 - 18:22

Recently Posted Videos