Citigroup (NYSE:C) reported a fairly good second quarter Monday morning, with adjusted earnings of $1 a share topping the Street consensus for 89 cents. Citigroup enjoyed a nice 2% bump early in the morning, though it had retreated to almost flat by midday.

Still, even sideways would be better than what investors have gotten in the past year: specifically, a loss of about 32%, which is worse than even the awful -23% performance put on by Bank of America (NYSE:BAC) in the past 52 weeks.

So there might be reason to think Citi’s on the mend, but should you buy Citigroup stock? To decide, let’s take a look at the pros and cons:

Pros

Global Powerhouse: Citigroup has taken an international approach to its business for decades. As of now, it has more than 100 million customers across 40 countries. In the long haul, Citigroup should benefit from global growth, especially in Asia and Latin America.

Stronger Financials: During the past few years, Citigroup has taken aggressive actions to restructure its operation, including massive layoffs and the sales of non-core divisions. However, the company also is seeing progress with the quality of its loan portfolio — in the latest quarter, Citigroup reduced its loan-loss reserves by $984 million.

Valuation: Dirt cheap at a price-to-earnings ratio of 7 and a 0.43 price-to-book.

Cons

Economic Headwinds: The global economy is again slowing down — particularly pressing to Citigroup given its large international footprint. Another issue is the strength in the dollar — as global investors get worried, there has been a flight to U.S. capital markets. And unfortunately, a strong dollar will cut into Citigroup’s profits.

Regulations: Banking always has been heavily scrutinized, especially because of the federal deposit guarantees. But since the financial crisis in 2008, regulations have become even more onerous, impacting areas like overdraft fees and proprietary trading, which once were lush profit centers.

And the regulations might get even more intense in the wake of recent gaffes such as JPMorgan‘s (NYSE:JPM) botched trade. Yet again, Congress is looking at finding ways to restrain the activities of banks.

The Squeeze: A bank makes money from the difference on the rates it pays on deposits and the interest it charges on loans. Yet with rock-bottom interest rates, the margins have been razor-thin. Banks have been trying to find ways to boost income (for instance, through fees), but customers generally have been resistant.

Verdict

Citigroup certainly has made lots of progress, and it even looks like the company might try to increase its dividend by the end of this year.

While headwinds like stricter regulations and a tough macroeconomic environment still weigh on Citigroup, the company is much leaner now and is very cheaply valued. And in the long term, the company stands to benefit from the growth of global markets.

So should you buy Citigroup stock? Yes — the pros outweigh the cons right now.

Tom Taulli runs the InvestorPlace blog IPO Playbook, a site dedicated to the hottest news and rumors about initial public offerings. He is also the author of the upcoming book How to Create the Next Facebook: Seeing Your Startup Through, from Idea to IPO. Follow him on Twitter at @ttaulli or reach him via email. As of this writing, he did not own a position in any of the aforementioned securities.