Citigroup Dividend, Falling Shares Make Bank Stocks Unbeatable

Bank shares are so cheap and their dividends so high that some of the world's biggest investors now say the combination is unbeatable.

After falling 12 percent this year, the 24 U.S. companies in the KBW Bank Index this month paid an average 3.96 percent of their share prices in dividends, the highest in the index's 16- year history. The last time Bank of America Corp. and Wells Fargo & Co. had such yields was in the early 1990s, just before a 44 percent advance in financial stocks.

Citigroup Inc., the second-largest U.S. bank by market value, is providing shareholders the biggest yield in two decades. The New York-based financial services company is trading at its lowest level to the Standard & Poor's 500 Index since 1999, relative to its net assets.

``The big banks are pretty cheap,'' said David Dreman, who oversees $22 billion at Dreman Value Management LLC in Jersey City, New Jersey. ``We are definitely looking at some of these high-yielding stocks.'' Dreman, ABN Amro Asset Management, First American Funds and Portfolio Management Consultants, who combined manage $433 billion, predict the shares are set to rebound.

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