Poor Citigroup (NYSE:C). How could a company so large and so powerful get so little respect?

Let's briefly review the criticisms volleyed at Big C:

  • It's too big.
  • It's too complicated.
  • It has no cohesive strategy.
  • It should be broken up.
  • CEO Chuck Prince doesn't know a bank from a basketball.

You'd think that Citigroup was barely turning a profit. However, when matched up against peer companies, its performance measures and valuation appear reasonable. Citigroup even carries an annual $2.16 dividend, for a yield of 4.3%.

Company

Assets
(in millions)

P/E

P/TBV*

Return
on Equity

Citigroup

$1,884,318

11.8

3.6

18.3%

Bank of America (NYSE:BAC)

$1,459,737

11.0

4.2

17.8%

JPMorgan Chase (NYSE:JPM)

$1,351,520

12.7

3.0

12.2%
*Tangible book value.
 Data provided by Capital IQ, a division of Standard & Poor's.

Citigroup remains a global powerhouse in financial services. Of its 2006 profits, 47% came from outside the United States; Prince aims to move that number as high as 60%, and recent acquisitions in Japan and Europe support that initiative. Another key initiative involves presenting one face to the customer under the Citi brand. There are mixed feelings about this branding effort, as Tom Taulli recently pointed out, but I think it's a step in the right direction.

I'm the first to admit that Citigroup needs to work out the issues above, especially whether the company should consider strategic alternatives such as a breakup via spin- offs. These smaller companies could be leaner and meaner and could earn higher multiples from Wall Street. The combination of a high dividend and the chance for capital appreciation in a breakup scenario makes Citigroup a compelling investment. However, the jury is still out on whether Prince would ever break up his great empire.

Before I sign off, I am compelled to use at least one gratuitous basketball analogy. Winning championships is about two things: defense and a big guy in the paint. Citigroup's global diversification provides defense against a market downturn, and $1.9 trillion in assets provides the muscle to put up big points year after year.

If you think Citigroup is a superior investment idea, vote "outperform" in Motley Fool CAPS, our community-intelligence database. And I'll see you in the next round.

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Bank of America and JPMorgan Chase are Motley Fool Income Investor recommendations.

Joey Khattab does not own shares of any of the companies mentioned. The Fool has a disclosure policy.