Tags: jpmorgan | chase | stock | dimon

Barron's: JPMorgan Chase Stock Is Solid Bet Under CEO Dimon

Barron's: JPMorgan Chase Stock Is Solid Bet Under CEO Dimon
(Piotr Swat/Dreamstime)

By    |   Monday, 10 June 2019 08:22 AM

Barron’s suggests that savvy investors would be wise to embrace the largest, best-run bank of them all: JPMorgan Chase & Co.

Barron’s admits this advice runs contrary to mainstream thinking as big bank stocks have come upon hard times amid falling interest rates and a threatening economic slowdown.

To be sure, JPMorgan’s financial numbers alone should allay fears of any slowdown. The bank had net income of $32.5 billion in 2018, more than any other U.S. company beside Apple.

“The volatility of our results is very low over time—even, surprisingly, in businesses like fixed-income trading, where a large chunk of the revenues are consistent, year to year,” said Jamie Dimon, the JPMorgan’s chairman and CEO, recently told Barron’s. He cited consumer banking and asset and wealth management as two resilient areas. “The macro environment doesn’t change anything we do,” Dimon added. “We invest through the cycle. The underlying economy is still doing OK.”

Under Dimon, the boss since 2006, JPMorgan has become the world’s top bank, with the industry’s deepest management talent and highest returns, Barron's reported.

The shares (JPM), at about $110 recently, trade for 11 times projected 2019 earnings of $10 a share and yield almost 3%. The bank is expected to boost its quarterly payout, now 80 cents a share, to about 90 cents, after the Federal Reserve releases the results of its annual stress tests for major banks later this month, Barron's said.

“Since the financial crisis, JPMorgan has taken market share almost every year in almost every business and puts up some of the best return metrics in the industry,” Jason Goldberg, an analyst with Barclays, told barron's. He ranks JPMorgan as one of his top picks, with a price target of $140.

And if the Fed cuts interest rates, as expected this year—possibly at its June or July meeting—JPMorgan and other banks could be set to “party like it’s 1995,” says Wells Fargo analyst Mike Mayo, referring to the end of a Fed tightening cycle 14 years ago. An inverted yield curve, with short rates above long ones, “could be mitigated by an extension of the economic cycle and potentially better loan growth,” Mayo says.

Meanwhile,  JPMorgan said last month that only 72% of shareholder votes approved its executive compensation packages, marking unusual opposition to pay for the bank’s top leaders, Reuters explained.

About 93% supported JPMorgan’s executive pay last year.

JPMorgan Chase also said all of its directors were elected, and that a shareholder proposal that the bank report annually on its global gender pay gap was voted down, according to preliminary tallies.

The votes were taken at the bank’s annual shareholder meeting at its offices in Chicago.

Around 29% of shareholder votes supported a proposal asking for more details on gender pay equity in the United States and some 28% of votes were in favor of a proposal aimed at easing shareholders’ access to proxy voting rights.

ISS, the influential proxy advisory group, urged investors to vote against the bank’s executive pay packages in a report published earlier this month because it objected to the portion of pay that was discretionary.

ISS advised investors to vote against the board’s pay packages for the bank’s top brass, including Dimon, twice before in 2011 and 2015, also over concerns about the portion of pay that was discretionary.

Dimon, who has led the bank since 2005, received a total of $31 million in compensation for the year 2018.

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Barron’s suggests that savvy investors would be wise to embrace the largest, best-run bank of them all: JPMorgan Chase & Co.
jpmorgan, chase, stock, dimon
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2019-22-10
Monday, 10 June 2019 08:22 AM
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