JPMorgan Chase & Co. (NYSE:JPM – Get Free Report) and Bank of America (NYSE:BAC – Get Free Report) are both large-cap finance companies, but which is the better business? We will contrast the two companies based on the strength of their profitability, institutional ownership, valuation, dividends, risk, analyst recommendations and earnings.
Institutional & Insider Ownership
71.6% of JPMorgan Chase & Co. shares are held by institutional investors. Comparatively, 70.7% of Bank of America shares are held by institutional investors. 0.8% of JPMorgan Chase & Co. shares are held by insiders. Comparatively, 0.3% of Bank of America shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.
Valuation & Earnings
This table compares JPMorgan Chase & Co. and Bank of America”s top-line revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| JPMorgan Chase & Co. | $169.44 billion | 4.01 | $58.47 billion | $19.74 | 12.31 |
| Bank of America | $101.89 billion | 3.08 | $27.13 billion | $3.22 | 12.81 |
Profitability
This table compares JPMorgan Chase & Co. and Bank of America’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| JPMorgan Chase & Co. | 20.96% | 16.99% | 1.31% |
| Bank of America | 14.10% | 10.29% | 0.84% |
Analyst Recommendations
This is a summary of current ratings and recommmendations for JPMorgan Chase & Co. and Bank of America, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| JPMorgan Chase & Co. | 0 | 9 | 10 | 0 | 2.53 |
| Bank of America | 1 | 5 | 16 | 3 | 2.84 |
JPMorgan Chase & Co. presently has a consensus target price of $252.89, suggesting a potential upside of 4.08%. Bank of America has a consensus target price of $48.45, suggesting a potential upside of 17.50%. Given Bank of America’s stronger consensus rating and higher possible upside, analysts clearly believe Bank of America is more favorable than JPMorgan Chase & Co..
Volatility & Risk
JPMorgan Chase & Co. has a beta of 1.1, indicating that its stock price is 10% more volatile than the S&P 500. Comparatively, Bank of America has a beta of 1.32, indicating that its stock price is 32% more volatile than the S&P 500.
Dividends
JPMorgan Chase & Co. pays an annual dividend of $5.60 per share and has a dividend yield of 2.3%. Bank of America pays an annual dividend of $1.04 per share and has a dividend yield of 2.5%. JPMorgan Chase & Co. pays out 28.4% of its earnings in the form of a dividend. Bank of America pays out 32.3% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. JPMorgan Chase & Co. has raised its dividend for 15 consecutive years and Bank of America has raised its dividend for 11 consecutive years.
Summary
JPMorgan Chase & Co. beats Bank of America on 11 of the 18 factors compared between the two stocks.
About JPMorgan Chase & Co.
JPMorgan Chase & Co. is a financial holding company, which engages in the provision of financial and investment banking services. It focuses on investment banking, financial services for consumers and small businesses, commercial banking, financial transaction processing, and asset management. It operates through the following segments: Consumer and Community Banking (CCB), Commercial and Investment Bank (CIB), Asset and Wealth Management (AWM), and Corporate. The CCB segment originates and services mortgage loans. The CIB segment makes markets and services clients across fixed income, foreign exchange, equities, and commodities. The AWM segment provides initial capital investments in products such as mutual funds and capital invested alongside third-party investors. The Corporate segment manages its liquidity, funding, capital, structural interest rate, and foreign exchange risks. The company was founded in 1799 and is headquartered in New York, NY.
About Bank of America
Bank of America Corporation, through its subsidiaries, provides banking and financial products and services for individual consumers, small and middle-market businesses, institutional investors, large corporations, and governments worldwide. It operates in four segments: Consumer Banking, Global Wealth & Investment Management (GWIM), Global Banking, and Global Markets. The Consumer Banking segment offers traditional and money market savings accounts, certificates of deposit and IRAs, non-interest and interest-bearing checking accounts, and investment accounts and products; credit and debit cards; residential mortgages, and home equity loans; and direct and indirect loans, such as automotive, recreational vehicle, and consumer personal loans. The GWIM segment provides investment management, brokerage, banking, and trust and retirement products and services; wealth management solutions; and customized solutions, including specialty asset management services. The Global Banking segment offers lending products and services, including commercial loans, leases, commitment facilities, trade finance, and commercial real estate and asset-based lending; treasury solutions, such as treasury management, foreign exchange, short-term investing options, and merchant services; working capital management solutions; debt and equity underwriting and distribution, and merger-related and other advisory services; and fixed-income and equity research, and certain market-based services. The Global Markets segment provides market-making, financing, securities clearing, settlement, and custody services; securities and derivative products; and risk management products using interest rate, equity, credit, currency and commodity derivatives, foreign exchange, fixed-income, and mortgage-related products. Bank of America Corporation was founded in 1784 and is based in Charlotte, North Carolina.
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