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JPMorgan’s (JPM) Strong Financials Likely To Sustain Strong Shareholder Returns

One look at JPMorgan’s 10-year stock price chart will tell you that its investors have reaped handsome rewards. The stock continues to close in on its all-time highs hit earlier this year. If the trend continues, JPM could be the first bank to hit the $1 trillion valuation mark.

JPMorgan Chase & Co. is a leading global financial service provider rooted in New York City. With operations spanning over 100 markets worldwide, the firm provides a wide array of financial services in commercial banking, investment banking, asset management, and private wealth management. JPM is widely recognized for its technological innovation and strong brand image, allowing it to serve a wide clientele with tailored needs.

A bank teller in a full-service office, counting and organizing cash.

Key products of JPM include credit cards, auto finance, mortgages, investment banking services like mergers and acquisitions, treasury and securities services, and asset management solutions. Among the main revenue drivers are the segments of Consumer and Community Banking including deposits and credit products, Corporate and Investment Banking such as trading and market-making activities, and Commercial Banking, particularly lending, treasury services, and investment banking.

The firm targets a wide customer base, including mega-corporations (Fortune 500 companies), small enterprises, institutional investors, and state entities. From retail banking for individual clients desiring personal financing options and corporate finance for businesses seeking corporate financial solutions to investment services for institutional customers, a diverse range of end markets is served to maintain a robust market position amid ever-evolving market conditions.

Many analysts are wary of the bank’s big size, fearful of stagnation in growth due to the company’s already large size. Moreover, competition from smaller banks that are willing to offer higher interest rates to depositors is also driving the negative sentiment.

We believe these variables are not significant enough to dent the company’s progress. JPMorgan Chase is the largest American bank by deposits, standing at $2.4 trillion as of Q3 2024. The reason these people choose to bank with JPM isn’t affected by what analysts believe. While significant growth in deposits from here on is unlikely due to its large size, the same applies to its competitors like Bank of America and Wells Fargo.

The company’s 15.3% CET1 ratio is the best among large banks, setting it apart from the pack when it comes to withstanding financial distress. The management’s credibility is further enhanced by the 2% dividend yield and a consistent share repurchase program that adds about 4% to the annual return for investors.

The only thing the investors may want to keep an eye on is innovative banking solutions offered by smaller banks or businesses. For instance, Robinhood offers a more than 5% interest rate on deposits, something that is likely to attract its younger consumers. Other threats like crypto are also there, though it is hard to see how it could become a more serious threat due to regulatory issues.

For now, JPM continues to play well on its strength, driving incredible shareholder returns. Investors would do well simply holding the stock and letting the management do its work.

JPMorgan ranks 17th on our latest list of the 31 Most Popular Stocks Among Hedge Funds. As per our database, 111 hedge fund portfolios held JPM at the end of the second quarter which was 112 in the previous quarter. While we acknowledge the potential of JPM as a leading investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as JPM but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

READ NEXT: $30 Trillion Opportunity: 15 Best Humanoid Robot Stocks to Buy According to Morgan Stanley and Jim Cramer Says NVIDIA ‘Has Become A Wasteland’.

Disclosure: None. This article was originally published at Insider Monkey.

AI Fire Sale: Insider Monkey’s #1 AI Stock Pick Is On A Steep Discount

Artificial intelligence is the greatest investment opportunity of our lifetime. The time to invest in groundbreaking AI is now, and this stock is a steal!

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Here’s why this is the prime moment to jump on the AI bandwagon:

Exponential Growth on the Horizon: Forget linear growth – AI is poised for a hockey stick trajectory.

Imagine every sector, from healthcare to finance, infused with superhuman intelligence.

We’re talking disease prediction, hyper-personalized marketing, and automated logistics that streamline everything.

This isn’t a maybe – it’s an inevitability.

Early investors will be the ones positioned to ride the wave of this technological tsunami.

Ground Floor Opportunity: Remember the early days of the internet?

Those who saw the potential of tech giants back then are sitting pretty today.

AI is at a similar inflection point.

We’re not talking about established players – we’re talking about nimble startups with groundbreaking ideas and the potential to become the next Google or Amazon.

This is your chance to get in before the rockets take off!

Disruption is the New Name of the Game: Let’s face it, complacency breeds stagnation.

AI is the ultimate disruptor, and it’s shaking the foundations of traditional industries.

The companies that embrace AI will thrive, while the dinosaurs clinging to outdated methods will be left in the dust.

As an investor, you want to be on the side of the winners, and AI is the winning ticket.

The Talent Pool is Overflowing: The world’s brightest minds are flocking to AI.

From computer scientists to mathematicians, the next generation of innovators is pouring its energy into this field.

This influx of talent guarantees a constant stream of groundbreaking ideas and rapid advancements.

By investing in AI, you’re essentially backing the future.

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A New Dawn is Coming to U.S. Stocks

I work for one of the largest independent financial publishers in the world – representing over 1 million people in 148 countries.

We’re independently funding today’s broadcast to address something on the mind of every investor in America right now…

Should I put my money in Artificial Intelligence?

Here to answer that for us… and give away his No. 1 free AI recommendation… is 50-year Wall Street titan, Marc Chaikin.

Marc’s been a trader, stockbroker, and analyst. He was the head of the options department at a major brokerage firm and is a sought-after expert for CNBC, Fox Business, Barron’s, and Yahoo! Finance…

But what Marc’s most known for is his award-winning stock-rating system. Which determines whether a stock could shoot sky-high in the next three to six months… or come crashing down.

That’s why Marc’s work appears in every Bloomberg and Reuters terminal on the planet…

And is still used by hundreds of banks, hedge funds, and brokerages to track the billions of dollars flowing in and out of stocks each day.

He’s used this system to survive nine bear markets… create three new indices for the Nasdaq… and even predict the brutal bear market of 2022, 90 days in advance.

Click to continue reading…