JPMorgan Chase & Co. (JPM): Six Billion Reasons To Consider Buying

It’s all about quality
Say what you will about JPMorgan Chase & Co. (NYSE:JPM)’s decision making when it comes to complicated trades, but when it comes to handling non-performing loans, they are the best. The company’s non-performing loan percentage dropped to 1.6%. In addition, the total dollars of non-performing loans dropped by a class leading 20.55%. These numbers represent the third and fourth reasons to buy the stock.

JPMorgan’s peers just don’t come close to matching the bank’s low non-performing percentage and the percentage decline in this category. The bank that came closest in non-performing loan percentage was Citigroup Inc (NYSE:C) with a 1.72% ratio. However, Citigroup’s decline in non-performers was 12% compared to over 20% at JPMorgan. Wells Fargo & Co (NYSE:WFC) Bank of America Corp (NYSE:BAC) are in a different class, and not in a good way. These two banks have non-performing loan ratios of 2.53% at Bank of America, and 2.44% at Wells Fargo. Again, while Bank of America Corp (NYSE:BAC) saw a 17.8% decrease in problem loans, they can’t match JPMorgan, and they are starting from a much higher percentage. Wells Fargo & Co (NYSE:WFC) has the double whammy of a high percentage of problem loans, and their decrease in these assets was the lowest of the group at just 7.21%.

The bottom line in credit quality is, JPMorgan already has the lowest ratio, and these problem loans are declining faster than any of their peers.

$6 billion reasons
The final reason to consider JPMorgan stock is, the company plans on retiring $6 billion in shares over the next four quarters. At current prices, this buyback would retire about 3.3% of the outstanding share count. With analysts calling for 7% EPS growth, this share repurchase could lift that figure. Since the shares carry over a 3% yield, and sell for less than 9 times projected earnings, this looks like quite a deal for investors.

During all of the financial turmoil, JPMorgan and Wells Fargo earned their reputations as strong, well managed institutions. Now that the economy is beginning to mend, JPMorgan seems to be pulling ahead of the pack. Long-term investors should consider adding JPM to their portfolio today.

The article 5 Reasons To Buy This Bank originally appeared on Fool.com is written by Chad Henage.

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