This Just In: Upgrades and Downgrades – UBS AG (USA) (UBS), Citigroup Inc. (C), JPMorgan Chase & Co. (JPM)

(And before you object that if all these stocks cost only 9 times earnings just a couple years from now, then Citi’s 13% growth rate doesn’t seem so bad… read this article first).

Meanwhile, if neither of Citi’s big rivals are being particularly generous with their dividend payouts either, then B of A’s 0.3% dividend yield, and Morgan Stanley’s 0.9%, are still both several times the size of Citi’s quarterly payments.

The perils of marrying up
Why is UBS making such a big mistake in deciding to recommend a purchase of Citigroup? Possibly the suitor is simply suffering from an inferiority complex about its own stock’s poor metrics — and seeing Citi as more attractive than it really is, compared to UBS.

Unprofitable itself on a trailing basis, and costing more than any other bank named so far when valued on forward earnings (UBS costs 14.4 times 2014 estimated earnings), UBS may be urging investors to “marry up,” and pick a better bank to invest in. If that’s the case, though, UBS appears to be missing the prettiest rose in the too-big-to-fail garden: JPMorgan Chase & Co. (NYSE:JPM).

Cheaper than all the rest, JPMorgan costs only 9.7 times trailing earnings, and only 8.7 times next year’s estimates. It’s also less risky, inasmuch as its valuation depends less on growth to justify the price. (JPMorgan’s five-year growth estimate is only 6.9%). And JPMorgan’s stock has the added virtue of paying a bigger dividend yield than the other majors — UBS included: A whopping 2.4%.

To my Foolish eye, this makes JPMorgan Chase & Co. (NYSE:JPM) the veritable Belle of the Big Banking Ball.

The article This Just In: Upgrades and Downgrades originally appeared on Fool.com and is written by Rich Smith.

Fool contributor Rich Smith has no positions in the stocks mentioned above. You can find him on CAPS, publicly pontificating under the handle TMFDitty, where he’s currently ranked No. 329 out of more than 180,000 members. The Motley Fool owns shares of Bank of America, Citigroup, and JPMorgan Chase.

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