JPMorgan Chase (NYSE: JPM) is a stock you do not want to miss in your portfolio. The bank has stood out from the rest of its peers in almost all dimensions including its business model, and internal and external customers. The bank now ranks first, according to the latest U.S customer satisfaction survey as reported by Reuters.
JPMorgan beat Wells Fargo (NYSE: WFC), which has been dominating the stats over the last decade. The San Francisco-based bank along with Bank of America (NYSE: BAC) andCitigroup (NYSE: C) posted a decline in ratings from the previous survey results.
The company also ranked the best place to work in another survey as reported on September 5 thereby, earning it a vote of confidence from its internal customers. Employee and customer satisfaction is a key element for the success of any business as it promises loyalty while also providing an alternate marketing tool. The world’s largest bank by assets also boasts another unique characteristic of being the only one, to have endured through the global financial crises of 2008/2009 without hiccups.
The company has a forward annual dividend yield of 2.80 percent up from the trailing twelve-month yield of 2.70 percent. The dividend rate is up $0.05 per share from a trailing twelve-month rate of $1.15 to a forward annual rate of $1.20. While these figures may not seem flattering enough to a value investor, the company’s fundamentals stand out from the rest.
For instance, Citigroup has a forward annual yield of 0.10 percent and a rate of $0.04 per share, while Bank of America’s forward annual yield stands at 0.40 percent at a rate of $0.04 per share. Barclays (NYSE: BCS) has a trailing twelve-month dividend yield of 2.40 percent, but its forward annual dividend yield is down to 1.60 percent.
JPMorgan also boasts one of the best dividend payout ratios with 23 percent of net earnings attributable to stockholders. Only Barclays pays at a higher rate, albeit marginally, with 24 percent payout ratio. Citigroup pays at two percent payout ratio, while Bank of America pays at 11 percent of net earnings.
The world’s largest bank by assets also prevailed during the most recent quarter in terms of reported cash flow. The company posted nearly $8.5 billion worth of cash and cash equivalents, while Bank of America and Citigroup reported negative balances of $17.3 billion and $125 million respectively.
The New York-based bank has a trailing twelve-month profit margin of 21.97 percent and an operating margin of 34.00 percent. Citigroup is the bank that comes close to JPMorgan’s profitability margins with 12.46 percent profit margin and 13.52 percent operating margin. On the other hand, Bank of America’s trailing twelve-month profit margin stands at 6.75 percent while its operating margin is pegged at 17.99 percent.
JPMorgan is regarded as one of the market sensitive banks in the U.S along with Bank of America and Citigroup. However, its sensitivity goes as far as 1.65 times to market risk, the lowest among its peers. Bank of America has a beta of 1.77 times, while Citigroup’s beta stands at 1.85 times. U.K based multinational, Barclays, has the highest exposure at 2.20 times.
Nonetheless, it is hard to find a whole basket of fresh eggs, especially when the basket is as big as “JPMorgan”. The company’s Net Interest Income is expected to decline by six percent in 2012, whereas counterparts Citigroup and Bank of America are expected to grow their net interest income by 12 and 17 percent respectively. Net Interest Income is a key measure for the performance of a commercial bank stock as it is the main source of income.
JPMorgan commands a majority of the performance measures in stock valuation including a vote of confidence from both customers and employees. The large banks have been branded “institutions too big to fail” by media and analysts following the bailout packages from governments in the aftermath of the 2008 financial crises. Bank of America sailed through the famous crises unscathed while the rest of its peers were hit hard by the crises. This justifies the bank’s strong fundamentals giving every investor the reason to consider it in their portfolios.
JPMorgan closed at $42.31 on Monday.