1. JPMorgan Chase & Co. (NYSE:JPM)
Number of Hedge Fund Holders: 108
Dividend Yield as of November 10: 2.38%
JPMorgan Chase & Co. (NYSE:JPM) is an investment bank and financial services firm that provides its services to leading organizations, institutions, and governments globally. The company divides its business into four notable segments. The Consumer and Community Banking segment is for the daily banking needs of the masses. The Corporate and Investment Bank segment caters to the needs of corporations. The Commercial bank segment is into providing payment services. Meanwhile, the Asset and Wealth Management segment invests in various asset classes on behalf of its clients.
Having numerous proven businesses under the same umbrella has resulted in strong cash flows and shareholder returns in the form of dividends. The company’s dividend yield of 2.38% is significantly higher than the S&P 500’s current dividend yield of 1.3%. The interest rates have been depressed since the start of the COVID-19 pandemic to encourage economic activity and companies like JP Morgan Chase are an alternative for lost income that could have been generated by investing in high-yield bonds.
Vltava Fund discussed its stance on JP Morgan Chase & Co. (NYSE:JPM) in its Q3 2021 investor letter. Here’s what the fund said:
“While all the previous names could be categorised as founder, continuing, or key shareholders, these last two names fall into the category of hired professional managers. This is actually the most numerous category among the bosses of large companies, but even among them there exist a number of individuals with exceptional long-term track records. In our view, these include also Jamie Dimon and Herman Gref.
We consider JP Morgan to be the strongest, largest, and most profitable bank in the world. It has not always been so, and the fact that it is what it is today can be attributed especially to its CEO Jamie Dimon. Dimon has spent his entire career in banking. He came to JP Morgan in a roundabout way in 2004 after the bank bought Bank One, of which he was CEO at the time. Since early 2006, Dimon has been CEO of the entire JP Morgan.
The quality and strength of JP Morgan under his leadership became fully apparent for the first time in 2008. Not only did JP Morgan help to stabilise the market by taking over the failing Bear Stearns in the spring of that year, but it was the only major US bank that did not require government assistance throughout the Great Financial Crisis and that was highly profitable even in the difficult year of 2008. Today, JP Morgan is even bigger, even more profitable, and even stronger than ever before. Many investors view banks with disdain, but a good bank with good management can be a very good long-term investment. From the time of its merger with Bank One in 2004 through the end of 2020, JP Morgan’s stock has outperformed even the S&P 500 index. The bank has earned a total net profit of USD 330 billion during this period, of which USD 232 billion has been paid out to shareholders in dividends and in share buybacks. I can recommend two books about Jamie Dimon: The House of Dimon and Last Man Standing.”
JP Morgan Chase & Co. (NYSE:JPM) reported its Q3 2021 earnings on October 13 and continued its trend of outperforming consensus estimates for the past five consecutive quarters. On October 25, Mike Mayo at Wells Fargo increased the price target on JP Morgan Chase & Co. (NYSE:JPM) from $200 to $210 and maintained an Overweight rating on the stock. The analyst highlighted his confidence in the earnings capacity of the company.
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