Should JPMorgan Chase & Co. (JPM) Ask for Share Buybacks or a Bigger Dividend?

But if Financial Times is correct, the bank isn’t angling for a dividend increase anyway. And from an investor perspective, JPMorgan already pays a healthy dividend — 2.4% — at least in comparison to its peers.

Goldman Sachs Group, Inc. (NYSE:GS) pays a paltry 1.3%, and even The Bank of New York Mellon Corporation (NYSE:BK) — one of the most conservative, solid banks out there — only pays 1.8%. Bank of America Corp (NYSE:BAC) and Citigroup Inc. (NYSE:C) only pay 0.3% and 0.1% respectively. (For the record, Citi has announced it will not increase its dividend, though it performed very well in this year’s CCAR.)

Foolish bottom line
As a JPMorgan shareholder, my vote is for more share buybacks. I invest primarily for share-price appreciation and am more interested in the value of my shares than any more dividend. I’m also interested in the bank that I own shares in remaining strong and doing well into the future.

As such, I’m appreciative of the fact that CEO Jamie Dimon takes such good care of his bank’s balance sheet, and I think this rumored request for a reduced share buyback is strongly indicative of that caretaking instinct. With the London Whale incident taken into account, Dimon is still, to me, the best risk manager in banking.

Expect JPMorgan Chase & Co. (NYSE:JPM) to ask for and receive approval from the Fed for some sort of shareholder capital-return plan, but a very reasonable one, Foolish readers. And as Thursday’s stress test results roll in for JPMorgan and and the rest of America’s big banks, stay tuned to this space for continuing coverage.

The article Should JPMorgan Ask for Share Buybacks or a Bigger Dividend? originally appeared on Fool.com and is written by John Grgurich.

Fool contributor John Grgurich owns shares of Goldman Sachs and JPMorgan Chase. Follow John’s dispatches from the bleeding heart of capitalism on Twitter @TMFGrgurich. The Motley Fool recommends Goldman Sachs. The Motley Fool owns shares of Bank of America, Citigroup, and JPMorgan Chase.

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